3.4.1 Corporate influences

Question 1

do corporate influences impact business decisions, if so which ones

Answer 1

yes, short and long term

Question 2

what is short-termism (what financial rewards do they focus on)

Answer 2

when a business prioritises short-term rather than long-term performance.
focusing on quick financial rewards, often at expense of investment in other areas e.g. R&D

Question 3

what is long-termism (+ what does it incorporate)

Answer 3

a more holistic approach to business strategy, incorporates aspects such as CSR + ethical behaviour

Question 4

4 negatives of short termism - SIO

Answer 4

1) quarterly financial reports -takes time + leaves business open to criticism
2) may lose competitive advantage - not investing in future
3) long-term profitability may be compromised - failing to invest in R&D
4) an over reliance on short term contracts means paying more for ad hoc contracts rather than building relationships

Question 5

why might a business focus on short-termism

Answer 5

• survival, pressure from shareholders