3.4.1 Corporate Influences

Question 1

Corporate influences

Answer 1

When a business expects a return on their investments

Question 2

Short-termism

Answer 2

Firms make a decision to increase financial performance over a short time period
Keeps shareholders happy
Used for new businesses
Reduces competitiveness
There is a lack in investment

Question 3

Long-termism

Answer 3

When a business concentrates on reaching long-term goals rather than short-term gains
Focuses the overall performance of the business
Invests into things like ARE&D, staff training, maintenance, efficiency and technology.

Question 4

Decision making

Answer 4

• Evidence-based
• Subjective based

Question 5

Evidence based

Answer 5

Structured approach
Uses analysed and gathered data
EG:
- Quantitative sales forecasting, investment appraisals, critical path analysis, decision trees …

Question 6

Subjective based

Answer 6

A subjective approach which is less structured
Decisions are based on opinions, experiences and ‘gut’ instinct.

Question 7

Evaluation of evidence based

Answer 7

+ Facts are verified and reliable
+ Validated
+ Well structured with data records

• Can take a long time to make a decision
• Best decision may not be clear
• Relies too much on evidence

Question 8

Evaluation of subjective based

Answer 8

+ Decisions made quickly
+ Can be used when there’s a lack of data

• People’s instinct may be wrong or biased
• May be difficult to make a decision
• May be quite a rational decision