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Business A-Level AQA 2023/24 (UPDATED) > 3.9 STRATEGIC METHODS –HOW TO PURSUE STRATGIES > Flashcards

3.9 STRATEGIC METHODS –HOW TO PURSUE STRATGIES Flashcards

1
Q

Define ‘streamlining’

A

Improvement of the efficiency of a certain process

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2
Q

Advantages of streamlining

A
  • Fewer errors and delays
  • Increased cost efficiency
  • Improved productivity
  • Better time management: can meet deadlines
  • Minimise risk
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3
Q

Define ‘retrenchment’

A

Downsizing the scale of a business’ operations

e.g. closing branches / selling off parts of a business / delayering

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4
Q

Reasons for retrenchment

A
  • Restructure to increase efficiency
  • Turn around poor performance
  • Focus on core business
  • Sell off less profitable parts of a business to improve overall performance
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5
Q

Reasons for growth

A
  • Increase shareholder value
  • Increase market share
  • Reduce average costs
  • Fulfil an objective of growth
  • Pressure from competitors
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6
Q

Define ‘organic growth’

A

INTERNAL GROWTH

  • Occurs when a business expands in size by opening new stores, branches, functions or plants
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7
Q

Define ‘inorganic growth’

A

EXTERNAL GROWTH

  • Occurs when a business expands in size by either merging with or taking over another business
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8
Q

Define ‘overtrading’

A

A business has expanded too rapidly resulting in it operating at a level beyond its resources leading to potential liquidity problems

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9
Q

Define ‘liquidity’

A

How easily an asset can be converted into cash without affecting its market price

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10
Q

Issues with growth

A
  • Diseconomies of scale
  • Overtrading
  • Harder to communicate
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11
Q

Define ‘synergy’

A

Potential financial benefit achieved through the combining of companies

Often a driving force behind a merger.

e.g. Ant&Dec not good on their own but good together

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12
Q

Methods of growth

A
  • Mergers
  • Takeover
  • Ventures
  • Franchising
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13
Q

Define ‘integration’

A

Bringing two or more businesses TOGETHER

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14
Q

Define ‘merger’

A

When two or more businesses agree to become integrated to form one business under joint ownership

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15
Q

Define ‘takeover’

A

When one business gains control over another and becomes the owner, can be achieved by buying 51% of shares

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16
Q

What are all of the forms of mergers and takeovers?

A
  • Horizontal
  • Vertical
  • Conglomerate
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17
Q

Define ‘horizontal’ (mergers/takeovers)

A

2 businesses at the same stage within a process integrate

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18
Q

Define ‘vertical’ (mergers/takeovers)

A

2 businesses at different stages within a process integrate

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19
Q

Define ‘FORWARD vertical’ (mergers/takeovers)

A

Joins with a business at next stage on the process

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20
Q

Define ‘BACKWARD vertical’ (mergers/takeovers)

A

Joins with a business at an earlier stage in the process

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21
Q

Define ‘conglomerate’ (mergers/takeovers)

A

2 unrelated businesses integrate

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22
Q

Define ‘joint ventures’

A

Two or more businesses agree to collectively set up a new business venture with all parties contributing equity to fund the set up and purchase of assets

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23
Q

Advantages of ‘joint ventures’

A
  • Combined expertise
  • Build connection with eachother
  • Shared risk and control
  • Financed through equity not debt
  • Greater potential capacity
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24
Q

Disadvantages of ‘joint ventures’

A
  • Shared revenue
  • Potential for conflict between stakeholders objectives
  • Cultural differences (each business runs differently)
  • Difficult to work effectively together
  • Loss of control for each business
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25
Q

Define ‘Greiner’s Growth Model’

A

Predicts the six phases and five crisis that businesses go through as they grow

The move from one stage to the next is usually triggered by a crisis

Businesses that cannot make adjustments get stuck in a difficult place and that hinders their growth

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26
Q

What are the 6 phases of the ‘Greiner’s Growth Model’ ?

Responses to the crisis

A
  • Creativity
  • Direction
  • Delegation
  • Coordination
  • Collaboration
  • Alliances
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27
Q

What are the 5 crises of the ‘Greiner’s Growth Model’ ?

A
  • Leadership: too big for leader
  • Autonomy: new managers demand more power
  • Control: more layers to hierarchy
  • Red Tape: slow decision making, less aware of external environment - higher costs (too many layers) - overweight and too many managers
  • Growth: business runs out of ideas
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28
Q

What are the 5 crises of the ‘Greiner’s Growth Model’ ?

A
  • Leadership: too big for leader
  • Autonomy: new managers demand more power
  • Control: more layers to hierarchy
  • Red Tape: slow decision making, less aware of external environment - higher costs (too many layers) - overweight and too many managers
  • Growth: business runs out of ideas
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29
Q

Outline the ‘leadership’ crisis of the ‘Greiner’s Growth Model’

A

Communication begins to fail as business grows

Business now too big for leader to get involved in everything

To solve a leadership crisis, businesses will appoint someone to drive the business forward

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30
Q

Outline the ‘autonomy’ crisis of the ‘Greiner’s Growth Model’

A

Business now has functional management

But leader still struggling to let go

New managers may demand more power

Workload can be too excessive which creates an autonomy crisis

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31
Q

Outline the ‘control’ crisis of the ‘Greiner’s Growth Model’

A

More formal management structures in place

But new layers of hierarchy needed to keep control

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32
Q

Outline the ‘red tape’ crisis of the ‘Greiner’s Growth Model’

A

Slow decision making as got to pass through multiple layers

Less aware of external environment

Higher costs (too many layers)

Overweight with too many managers

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33
Q

Outline the ‘growth’ crisis of the ‘Greiner’s Growth Model’

A

Growth slowing as business runs out of ideas

Alliances are sought after (mergers or takeovers)

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34
Q

Suggest the combinations of phases and crisis within the ‘Greiner’s Growth Model’

A

Creativity + N/A

Direction + Leadership

Delegation + Autonomy

Coordination + Control

Collaboration + Red Tape

Alliances + Growth

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35
Q

Criticism of the ‘Greiner’s Growth Model’

A

SIMPLISTIC

  • Not every growing business will face crisis
  • Delegation might also always remain a problem in most businesses, not just at this stage
  • Ignores the pace of growth
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36
Q

Contextual example of the ‘Greiner’s Growth Model’ not working

A

CocaCola has grown steadily over 100+ years and has not experienced crisis to trigger growth

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37
Q

What can we learn from ‘Greiner’s Growth Model’

A
  • Growing a business is rarely easy
  • Growth poses many management and leadership challenges (crises)
  • Leadership and organisational structure has to evolve as the business changes
  • Businesses that don’t adjust will experience lower growth than those that do
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38
Q

Outline the ‘creativity’ phase of the ‘Greiner’s Growth Model’

A
  • Beginning of all growth
  • Staff low
  • Growth from long working hours
  • Informal communication
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39
Q

Outline the ‘direction’ phase of the ‘Greiner’s Growth Model’

A
  • Communication formalised
  • Major strategic decisions are made
  • Workload can be too excessive which creates an autonomy crisis
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40
Q

Outline the ‘delegation’ phase of the ‘Greiner’s Growth Model’

A
  • Organisational structure expanded
  • Head office now required to oversee and coordinate the decisions made
  • Identify new markets / spot gaps
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41
Q

Outline the ‘delegation’ phase of the ‘Greiner’s Growth Model’

A
  • Organisational structure expanded
  • Head office now required to oversee and coordinate the decisions made
  • Identify new markets / spot gaps
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42
Q

Outline the ‘coordination’ phase of the ‘Greiner’s Growth Model’

A
  • Business can now expand
  • Isolated departments are now working together for the goal of the business
  • Performance related pay introduced and aligned to corporate goals
  • Business slow to respond to external changes, so growth opportunities are lost
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43
Q

Outline the ‘collaboration’ phase of the ‘Greiner’s Growth Model’

A
  • Business must now switch management styles

- Functional specialists from different areas will work together in project teams

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44
Q

Outline the ‘alliances’ phase of the ‘Greiner’s Growth Model’

A
  • Most organisation eventually stop growing because they run out of ideas
  • To grow again, they will need to form alliances with other businesses
  • Mergers, take-overs and joint ventures
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45
Q

What must a business do if a crisis occurs? (‘Greiner’s Growth Model’)

A

Reorganise if it is to continue growing onto the next phase

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46
Q

Who founded the ‘Greiner’s Model of Growth’ ?

and… IN WHAT YEAR

A

Larry Greiner in 1972

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47
Q

Advantages of using technology to gather data

A
  • Reduces human error: more accurate
  • Quick
  • Accurate
  • Efficient
  • Professional
  • Collect consumer opinions worldwide
  • Can utilise social media and review sites
  • Bigger storage: cloud data
  • Can be more secure online
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48
Q

Examples of technology in gathering data

A

COOKIES

  • Shop Wi-Fi: know what you are looking at and where you are in the store
  • Loyalty cards: spending habits
  • INTERNET: reviews and cookies
  • Newsletters
  • Social media
  • Online surveys
  • Search engines
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49
Q

Disadvantages of using technology to gather data

A
  • Staff need educating
  • Possible data breaches, if not secure - TWITCH
  • More costly: expensive to maintain; fix and upgrade
  • Customers may feel violated
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50
Q

What does the ‘experience curve’ suggest?

A

The more experienced a business has in producing a particular product, the lower its costs are.

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51
Q

Define ‘innovation’

A

Development of a new idea into a new product or process

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52
Q

Define ‘product innovation’

A

Changing a product that already exists or developing an invention into a brand new idea.

Ideas, theorises about a potential product

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53
Q

Define ‘process innovation’

A

Changing a process of production that already exists or putting into practice a brand new production process

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54
Q

Pressures to innovate

A
  • Decline phase
  • Stay ahead of dynamic market
  • Businesses don’t want to miss opportunities to innovate
  • Competitor actions
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55
Q

Advantages of Innovation

A
  • Businesses cannot afford to stand still in a competitive market
  • Today’s innovations are later rising stars / cash cows
  • Although expensive, alternative risk of losing future markets might be worse
  • Benefits economy as a whole, pushing humanity forward
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56
Q

Disadvantages of Innovation

A
  • Other businesses may copy / react with own innovations to compete
  • Legal implications often arise with other businesses questioning if production or process is an innovation (‘we did it first’)
  • TIME CONSUMING - R&D
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57
Q

Ways of becoming an innovative organisation

A
  • Kaizen
  • Research / development
  • Intrapreneurship: allows an employee to act like an entrepreneur within an organisation
  • Benchmarking
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58
Q

Contextual example of Kaizen

A

Pizza Hut: Lemon cutting, task changed for waiters to kitchen staff

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59
Q

Define ‘kaizen’

A

Concentrates on frequent small improvements

Small steps so service becomes more efficient

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60
Q

Define ‘benchmarking’

A
  • Process of identifying best practice normally within the industry
  • Comparing to the best and seeing how to improve
    e. g. businesses seeing what works for other businesses then copies this
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61
Q

Define ‘intrapreneurship’

A

Employees in larger organisation act same way as entrepreneurs

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62
Q

Define ‘greenwashing’

A

False claims about positive impact on environment

63
Q

Advantages of ‘Kaizen’

A
  • Improve quality
  • Improve productivity: more tasks (job enrichment) &&& employees take ownership of their work
  • Employees feel like they are helping the business to achieve goals
  • Reduce waste
  • Improves small issues that are usually overlooked
  • Small improvements less likely to require major capital investment than major process changes (cheaper to manage)
64
Q

Disadvantages of ‘Kaizen’

A
  • Additional training
  • Increased pressure on employees: targets set
  • Some workers may see Kaizen as an extra burden: demotivating
  • Contrasts with major leaps seen in an industry, due to radical new technology
  • Can take time to embed Kaizen successfully into a company’s culture
65
Q

Advantages of Benchmarking

A
  • Gain an independent perspective about how well you perform compared to other companies
  • Identify areas for improvement
  • Set performance expectations for employees
  • Enable a mindset and culture of continuous improvement - motivating
66
Q

Disadvantages of Benchmarking

A
  • It doesn’t really measure effectiveness
  • Not very flexible
  • Requires lots of information: time consuming to gather
  • May put up boundaries that could stop innovative thinking.
67
Q

Ways of protecting innovation

A
  • Copyright
  • Patent
  • Trademark
68
Q

What is ‘copyright’ ?

A
  • Legal protection for anyone that has produced work in a range of areas
  • It is illegal to use copyrighted work and without the permission of the owner
  • Lasts 70 years after person dies
  • Media, articles, songs, art
69
Q

Difference between patent and copyright

A
  • Copyright don’t have to pay
  • Patent have to pay
  • Copyright focuses on media, articles, songs and art
  • Patent focuses on ideas, products and inventions
70
Q

What is ‘patent’ ?

A
  • Legal protection of a unique feature of a product or process
  • Have to apply through IPO
  • Ideas, products, inventions
  • Paid for
71
Q

What is ‘trademark’ ?

A

(TM)

Protects logo, catchphrase or slogan

72
Q

Problems of using technology

A
  • High start-up costs / investment appraisal
  • Expensive fixed cost
  • Depreciate in value as further innovations occur
  • Staff need additional training
  • Data breaches / viruses
73
Q

Define ‘M-Commerce’

A

Commercial transactions conducted electronically by mobile phone

74
Q

Advantages of using technology

A
  • Improved efficiency
  • Convenience for customers - ‘Click and Collect’
  • Utilise the internet - becomes their ‘place’
  • Reduced human error
  • More effective the tech is, more customers reachable
75
Q

Define ‘big data’

A

Describes vast amount of data generated by the technological devices that we use daily

76
Q

Define ‘data mining / analytics’

Give example of usage

A

Process of sifting through data to try and identify trends and relationships

(e.g.) links to HR: when recruiting, businesses look through social media accounts

77
Q

Define ‘Enterprise Resource Planning’ (ERP)

A

Software used by businesses to collect, store, manage and interpret data from different business functions

Coordinate all operation systems

78
Q

Factors that ‘Enterprise Resource Planning’ enables a business to do (ERP)

A
  • Advanced planning / scheduling
  • Billing / cost management
  • Traceability: where suppliers are coming from
  • Helps with quality control
  • Production organisation
  • Can do all accounting for a business - helping financial department
79
Q

What do ‘PLEX’ offer?

A

A personalised ‘Enterprise Resource Planning’ (‘ERP’) software

80
Q

Benefits of Enterprise Resource Planning (ERP)

A
  • Reduction in admin costs
  • Increase profitability
  • Cloud - protection
  • Accuracy, no human error
  • Can be personal software - (e.g. from PLEX)
  • Efficient
81
Q

Where is ‘Enterprise Resource Planning’ (‘ERP’) mostly used?

A

Manufacturing industry

82
Q

What can ‘Enterprise Resource Planning’ (‘ERP’) contribute towards?

A
  • Organisation of kaizen
  • Efficiency
  • Economies of scale
83
Q

Define ‘intellectual property’

A

A creation of the mind

84
Q

Define ‘offshoring’

A

Establishing production sites abroad

85
Q

Disadvantages of ‘offshoring’

A
  • Time Zone Differences and Proximity: hard to supervise?
  • Communication and Language Issues
  • Cultural and Social Differences
  • Risk of exposing confidential data - if in poorer, less secure country
86
Q

Advantages of ‘offshoring’

A
  • Lower costs: less devloping country
  • Lower risks
  • Utilise digital communications
  • Opportunities for staff to work abroad: motivating
  • Bigger talent pool
87
Q

What process leads to innovation?

A

Research and Development

88
Q

Define ‘research and development’

A

An activity that companies undertake in order to develop new products, processes or services OR to improve those that already exist

89
Q

R&D Cycle

A
  1. Ideation and theorising
  2. Research and development
  3. Design and development (final)
90
Q

Where is R&D mostly used? (Context)

A

Pharmaceuticals and science

91
Q

Main 2 Types of Research within R&D

A
  • Basic research

- Applied research

92
Q

Define ‘basic research’ (R&D)

A

Acquiring knowledge and using it to build understanding and intelligence.

This knowledge can be the foundation for further R&D projects, and feed into the business’ strategic decisions

93
Q

Define ‘applied research’ (R&D)

A

ADVANCED RESEARCH

A lot more defined than ‘basic research’.

Looks to achieve a specific objective

Often what leads to development phase

94
Q

What is the ‘design and development phase’ ? (R&D)

A

Taking an idea and making it into a product or process

Translating the research into a commercial product or service

95
Q

What is the ‘design and development phase’ ? (R&D)

A

Taking an idea and making it into a product or process

Translating the research into a commercial product or service

96
Q

Examples of ‘design and development phase’ (R&D)

A
  • Prototyping
  • Trials
  • Testing
  • Refinement
97
Q

Why is prototyping key? (R&D)

A

Allows you to identify and overcome issues, improving the design

Prevents these issues before official launch

98
Q

How would a business conduct R&D to look at ‘new product research and development’ ?

A

RAPID CHANGING CONSUMER DEMANDS AND EMERGING TECH - always prepared to adapt

Before developing a new product, get a deep understanding of the market and the user needs

This lays the groundwork for the development of the new product

99
Q

How would a business conduct R&D to look at ‘improving existing products and processes’ ?

A
  • Continual evaluation of existing products/processes is key

- Legislative changes / shifts in user-wants can mean a product/process must evolve to remain viable

100
Q

Advantages of R&D

A
  • Keeps business innovative: facilitate dynamic market
  • Effective use of time and resources
  • Tax incentives (tax relief)
  • Positively impact the wider economy (hence the tax incentives)
101
Q

Disadvantages of R&D

A
  • Very costly: global spending $1.7T
  • Time consuming: may waste time
  • No guarantee of success
  • Staff training required?
102
Q

What are the two approaches to ‘R&D’ ?

A
  • Independently

- Outsource it

103
Q

Research and development should be factored into…

A

the budget

104
Q

Contextual example of successful ‘R&D’ and being innovative

A

Apple spend BILLIONS on R&D

Innovate their iPhone product (existing) to be better each year

Adjusting to competitor actions and adapting to customer expectations and tastes

R&D products years in advance to gain competitive advantage - LONG-TERMISTIC

105
Q

How are ‘R&D’ and ‘innovation’ linked?

A

Innovation is a broad term: refers to those ideas, products and methods/processes that are new and different

^ R&D is about acting on this and making it a reality

A product can not be fully innovated without R&D - it develops the product

106
Q

Contextual example of R&D failure

A

GoogleGlass

107
Q

(a) leads to (b)

[R&D]

What are A and B?

A

a = R&D

b = Innovation

108
Q

Contextual example of data mining

A

Cambridge analytica

109
Q

Why may the ‘experience curve’ happen?

A
  • More efficient and better-skilled labour
  • More standardisation of production and specialisation: process
  • Better use of technology (automation)
  • Product improvements / design
110
Q

Implications of the ‘Experience Curve’

A
  • Business with most experience will have a significant cost advantage
  • Business with highest market share likely to have most/best experience

Therefore…

  • Experience is a barrier to entry
  • Try to maximise market share
111
Q

Likely features of low-cost operators/businesses

That leads to them being experienced

A
  • High levels of productivity and efficiency
  • High capacity utilisation
  • Large scale = economies of scale
  • Use bargaining power to negotiate lower prices from suppliers
  • Lean production methods and culture (reducing waste)
  • Access to the widest and most important distribution channels
112
Q

Criticism of the ‘Experience Curve’

A
  • Model developed in 1960’s… long ago! (Limited in a modern business world)
  • Experience isn’t everything when seeking competitive advantage
  • Market leaders become complacent
  • Experience may cause loss of innovation (think they are too experienced to innovate) - (experience leads to R&D which leads to innovation, so is IMPORTANT)
113
Q

Context of ‘Experience Curve’

A

Kodak and Nokia

Had high market share, but became complacent, perhaps consequent to their expertise

114
Q

Concepts associated with synergy

A
  • Takeovers
  • Mergers
  • Joint ventures
  • Strategic alliances
115
Q

‘Synergy’ context

A

Sainsbury’s trying to take over Argos

Synergies from doing this:

  • £500m in cost savings
  • Generate around £160m in revenue synergies from deal
116
Q

What are the 2 main reasons for synergy?

A
  • Cost savings

- Higher sales / revenue

117
Q

Cost savings synergy (benefits from taking over for cost saving purposes)

A
  • Better deals with suppliers
  • Higher productivity and efficiency from shared assets
  • Economies of scale!!!
  • Easiest to achieve
118
Q

Higher sales / Revenue synergy (benefits from taking over higher sales / revenue purposes)

A
  • Cross-selling for customers of both businesses
  • Access to new distribution
  • Brand extension
  • New geographic markets opened up
119
Q

Define ‘internationalisation’

A

Designing a product in a way that it may be readily consumed across multiple countries.

This process is used by companies looking to expand their global footprint beyond their own domestic market understanding consumers abroad may have different tastes or habits.

120
Q

List methods use to enter international markets

A
  • Export
  • Licencing
  • Alliances
  • Direct investment
121
Q

Define ‘exportation’ (entering international markets)

A

Selling goods and services produced in one country to another country

122
Q

Define ‘licensing’ (entering international markets)

A

Business gives permission to a 3rd party to sell their goods + services abroad

123
Q

Define ‘alliances’ (entering international markets)

A

Forming partnerships with one or more businesses operating in another country

124
Q

Define ‘direct investment’ (entering international markets)

A

Capital expenditure to establish physical presence in another country

e.g. setting up a manufacturing plant

(Only very established businesses tend to do this)

125
Q

Define ‘reshoring’

A

Opposite of ‘off-shoring’

Relocating to domestic country, following

126
Q

Why may ‘reshoring’ happen?

A
  • Cost saving no longer significant
  • Quality issues
  • Shorter lead times
  • Government incentives (grants+taxes)
  • Infringement of intellectual property
127
Q

Pressures for local responsiveness (managing international businesses)

A
  • Responding to cultural diversity (e.g. changing menu)
  • Ease with which products can be altered for this
  • Unintended meanings / inappropriate marketing
128
Q

Pressure for cost reductions (managing international businesses)

A
  • Ability to benefit from economies of scale

- Whether a business competes by being low cost or highly differentiated

129
Q

What is a contextual example of a business which is not pressured by cost not local responsiveness?(managing international businesses)

A

APPLE!

Works on added value

130
Q

Axis on ‘Bartlett and Ghoshal’ model

A

X: Pressures for local responsiveness

Y: Cost Pressure

WORKS ON LOW AND HIGH BASIS

131
Q

Contextual example of local responsiveness (cultural diversity)

A

McDonald’s menu

MCCURRY (India)

132
Q

Describe the layout of ‘Bartlett and Ghoshal’ model

A

Top left: Global
Bottom left: International

Top right: Transnational
Bottom right: Multi-domestic

133
Q

What does the ‘Bartlett and Ghoshal’ model indicate?

A

Strategic options for businesses wanting to manage their international operations based on two pressures

134
Q

Describe ‘Global’

(CP: High // LR: Low)

Bartlett and Ghoshal

A
  • Pressure to achieve cost savings through global integration
  • Little pressure to adapt products to meet local differences
  • Therefore, the business sells largely homogeneous products
  • Subsidiaries abroad have limited functions e.g. marketing
  • Product design / innovation remains the responsibility of HQ in origin country
135
Q

Describe ‘International’

(CP: Low // LR: Low)

Bartlett and Ghoshal

A
  • Little pressure to achieve cost savings through global integration
  • Little pressure to adapt to meet local differences
  • The business primarily runs from home country

Context: APPLE!!!

136
Q

Describe ‘Transnational’

(CP: High // LR: High)

Bartlett and Ghoshal

A
  • Pressure to achieve cost savings through global integration
  • Pressure to respond to local differences
  • Business encourages sharing of ideas and expertise between subsidiaries
  • Foreign subsidiaries enjoy a relatively high level of autonomy
137
Q

Describe ‘Multi-Domestic’

(CP: High // LR: Low)

Bartlett and Ghoshal

A
  • Little pressure to achieve cost savings through global integration
  • Little pressure to adapt products to meet local differences
  • The business operates a portfolio of relatively autonomous organisations
138
Q

Context for ‘intrapreneurship’

A

Gmail: employees at Google allowed time for personal projects

(20% of their time)

139
Q

Differences between ‘Entrepreneurship’ and ‘Intrapreneurship’

A

E:

  • Entrepreneurial activity by entrepreneur
  • Rewards go to entrepreneur
  • Risks taken by entrepreneur

I:

  • Entrepreneurial activity by employees and managers
  • Most rewards go to company
  • Risk taken by company
140
Q

Ways to encourage / facilitate intrapreneruship

A
  • Structured time away from normal day-to-day work, allowing employees to develop ideas
  • Cross functional teams to lead innovation projects (bringing teams together)
  • Secondment of staff to smaller businesses/startups
  • Staff competition and innovation days
141
Q

Define ‘secondment’

A

A chance to temporarily work on a different team within an organisation

142
Q

Reasons why large businesses are often NOT entreprenuerial

A
  • Complacency / arrogance
  • Bureaucracy
  • Reward systems do not provide an incentive to innovate
  • Short-termism
143
Q

Define ‘bureaucracy’

A

Means of state control

Lack of innovation in a business

Hierarchy of an organisation

144
Q

What large businesses need for successful intrapreneurship

A
  • Senior management support (e.g. mentoring)
  • Communication
  • Culture of innovation and creativity (building this culture)
  • Reward systems for innovations
  • Resources: business needs to show that it can back its ideas
145
Q

Possible levels of Kaizen

A
  • Individual levels

- Groups: Kaizen Groups / Quality Circles
Kaizen is compatible with team working and cell production

146
Q

Why is Kaizen cheap to manage?

A

Small improvements are less likely to require major capital investment than major process changes

147
Q

How will a business may Kaizen effective?

A

Has to be a culture of trust between staff and managers

Good two-way communications and de-layered organisations would also support this approach

148
Q

What may force a business into retrenchment? (causes)

A
  • New leadership
  • Low ROCE
  • High costs + low profitability
  • Loss of market share
  • Failed takeovers and mergers
  • Economies downturn (external)
  • Change of ownership
149
Q

What is a disadvantage of significant retrenchment, in a large business?

A
  • Associated with fundamental reappraisal, therefore complex + costly
150
Q

Suggest 3 retrenchment actions

A
  • Change organisational structure
  • New leadership
  • Fewer people
151
Q

Possible implications of ‘changing organisational structure’ (as a retrenchment action)

A
  • Greater workload = higher stress
  • New, unfamiliar teams/colleagues
  • Different reporting structure
152
Q

Possible implications of ‘new leadership/ownership’ (as a retrenchment action)

A
  • Different leadership style
  • Uncertainty
  • New priorities, aims and objectives
  • Previous projects abandoned (fresh start)
153
Q

Possible implications of ‘fewer people’ (as a retrenchment action)

A
  • Loss morale / increased de-motivation

- Bad news for external stakeholders (e.g. local community / local suppliers)

Business A-Level AQA 2023/24 (UPDATED) (14 decks)

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