3.4.1 Corporate Influences

Question 1

Corporate timescales defined?

Answer 1

• Corporate timescales refers to strategy and the expectation of when a return will be achieved

Question 2

What is short termism ?

Answer 2

• Short-termism means that a business is only interested in a quick financial reward
• For example the business may be focussed on monthly profit figures or quarterly sales figures

• Short-termism is choosing a course of action which is best in the short term, but may be critical in the long-term

Question 3

What is a short termism attitude?

Answer 3

• A short-term attitude by a business is a focus on short-term returns on investments
• Instead they should be looking to invest in research projects that will give the business the competitive advantage
• Short-termism makes businesses fail to innovate

Question 4

What is Long - termism?

Answer 4

• Long-termism is a whole business approach
• Incorporates CSR
• Considers ethical behaviour of the
business in decision making
• Research and development have long term goals
• Staff development is seen a long term objective of the business, to retain and develop staff
• Long-term technology investments secure data for the future

Question 5

Evidence based decision making?

Answer 5

• Decisions relating to the business are based on evidence and data which is valid and trusted information
• Decisions should be based on a combination of critical thinking and the best available evidence
• Decisions are made using evidence from multiple sources to increase the probability of a favourable outcome

Question 6

What is subjective decision making?

Answer 6

• Decisions relating to a business which are based on personal perspectives, feelings and opinions

Question 7

Short-termism

Answer 7

a business that focuses on short-term returns on investment e.g. a start-up business’s first year’s profits

Question 8

Long-termism

Answer 8

ability of a business to invest in projects over a long term e.g. a cure for cancer

Question 9

Evidence based decision making

Answer 9

based on valid and reliable data e.g. we should give Shivani the job because she has smashed her last 4 targets

Question 10

Subjective decision making

Answer 10

based on personal feelings and opinions e.g. we should give Tom the job I like him

Question 11

Examples of Short-termism

Answer 11

• Maximise short term profits
• Invest less money in research and development
• Invest less in training
• Return cash to shareholders
• Engage in asset stripping
• Arrange more short term contracts
• Pursue external growth rather than organic growth

Question 12

Drawbacks of short termsim

Answer 12

• Long term profitability of a business might be threatened by focusing too much on the short term.
• Companies may lose their competitive edge in overseas markets.
• may inappropriate

Question 13

Asset stripping

Answer 13

The practice of buying businesses and breaking them up. The profitable parts are sold for cash and the rest are closed down.

Question 14

Strategic decisions

Answer 14

Decisions concerning policy that can have a long term impact on a business. Can be risky.

Question 15

What are influences on business decision

Answer 15

• Corporate influence
• Corporate culture
• stakeholder perspective
  -Business ethics

Question 16

Corporate influences

Answer 16

Long term objectives and short term goals to boost profits.

Question 17

Corporate culture

Answer 17

If the culture is open , creative , flexible and innovative a business is more likely to make a decision that involves change. If a culture is more resistant to change decisions are likely to be more cautious and involve less risk. Which can result in less innovation and a loss of competitive edge.

Question 18

Stakeholder perspective

Answer 18

The shareholder approach is that the view of shareholders influence decision making
- stakeholder approach means that the views and needs of a wider range of stake holders such as customers, employees , suppliers and the environment are considered when deciding

Question 19

Process of evidence based decision making

Answer 19

1. Setting / identifying objectives
2. Gathering ideas and data
3. Analysing ideas and data
4. Making a decision
5. Implementing the decision
6. Monitoring and evaluation