3.4.1 Coperate Influences Flashcards
What is corporate time scales?
expectations of when a return will be achieved
what is short termism ?
When you priorities short time performance is a long-term performance
What are the 7 business may do if they focus on short termism?
Maximise short-term profit - aim to increase shareholder value -persuasive advertising
minimise research and development -prevent negative cash flow
maximise returns to shareholders
Do rapid external gross rather than organic
invest less in human resources
Priorities short term supply contracts
What are the 4 drawbacks of short termism?
Long time profitability
will be threatened as he has too much on the short term - failed to invest in research
And development
Companies may lose their competitive advantage over seas if long-term performance is ignored
Short termism - need to make more financial report may force companies to be more disciplined. - extra time could be used in productivity
overreliance short term contracts may be inappropriate
What is long termism?
Long-term performance prioritied and decisions have an impact of the vision of the business
What happens with the business can incorporate long termism?
Incorporate corporate social responsibility
ethics
invest in long term technology
What is evidence based decision making?
What do we use?
What is the based on?
Gathering information about the business using a statistical and systematic approach
To reach a conclusion
We use data That is valid and can be trusted
Based on critical thinking
what is subjective decision making?
When the Personal opinion influence the action chosen to reach a conclusions
what are the two types of decision-making?
evidence based and subjective decision making
What kind of 5 steps of evidence based decision making ?
ask - the problem into the question
Acquire evidence
Analysis or apprise the evidence
Apply Evidence to the problem
the assess the Outcome of the decision
What are the four characteristics of a weak corporate culture?
- Lack of clear values - uncertain about expectation
Poor communication - misunderstandings
little collaboration - little innovation
Lack of trust and accountability - I blame culture discourages ownership and fosters negativity
Resistance to change - can lead to missed opportunities to miss opportunities
What are the six characteristics of a strong corporate culture?
Shared beliefs and values -everybody aligns with the corporate principles of the business - help guide actions and decisions
clear communication - effective and allows transparency
teamwork - good for innovation and problem-solving
trust and accountability - encourages ownership and responsibility
adaptability and resilience -
Why does corporate culture matter?
create a working and innovative environment - good for collaboration
What do weak business cultures create?
Friction and stagnation
What are the two types of stakeholders?
What do businesses need to do?
anybody who are interested in a business
Take into account the needs and interests of stakeholders - to operate fully for the long term
Internal - within the business
employees
managers
directors
owners
External- outside of the business
customers,
shareholders
creditors
suppliers,
local community
government
pressure groups
What are the stakeholder vs Shareholder objective conflicts?
stakeholders- Objectives may come to conflict with board of directors- financial over environmental therefore decreasing the share value of the business
Customers - want low prices - owners want as profit as high as possible charge high prices
Supplies want high price- for their suppliers - conflict owners lowest cost of production as possible
Government - want tax and to control- CMA - conflict with owners
tax erodes profit they want to open stores l to expand market share
Unions - want working conditions to be good and high pay 💰 - conflict- want high profit reduced labour costs charge lowest wage possible
Employees- want pay and job security - to maximise profits we only offer zero based contract 📑
Managers - want rigid budgets and promotion -boards of directors may oppose ideas once something - fresh ideas 💡 from outside
Competition - small local independence want market share- want to continue to expand stores 🏬
What is stakeholder mapping?
A tactic of how businesses engages stakeholders
What are the four traits on stakeholder mapping?
Monitor
keep informed
Keep satisfied
managed closely
What stakeholders are in monitor stakeholder mapping?
What do they require?
Suppliers - minimal effort - get information from company website
What stakeholders are in keep informed in
stakeholder mapping?
What do they require?
Keep informing decisions to potential supporters of the business in the future
local communities
What stakeholders are in keep satisfied stakeholder mapping?
What do they require?
Any communication is to keep level of interest in the business
pressure groups
employees
What stakeholders are in manage closely in stakeholder mapping?
What do they require?
Should be involved with decision-making and engaged with the regularly
Government and managers
What are the positive and negative impact a business may have towards the local community?
Positive - if the Business employees locally more people will have displosable income
increase spending and allow local businesses to prosper
Neg - Maybe criticise from local community environmental issues or noise pollution
What could be another external stakeholder?
Business activity could impact the environment resource depletion and habitats could
be destroyed.
Representative groups may be interested in their practices.
What are the two different types of approaches of business can take?
What are they both likely to do?
Shareholder - meeting the needs of shareholders -
Profit maximisation - increase in dividends and improve the share price
stakeholder approach - interdependencies between stakeholder groups - likely to decrease profits may increased costs
.- meeting employees’ needs by paying higher wages will increase salary costs
Owners may be disadvantaged
What happens if the business is experiencing financial difficulties?
Share holders may lose value in investments and employees may face drop cuts
