Advantages and Disadvantages Flashcards
1
Q
4 advantages of decision trees
A
- Numerical numbers are easier to plan
- Visual representation
- Allow managers to compare options objectively
- Useful in familiar situations
2
Q
3 disadvantages of decision trees
A
- Ignores qualitative data
- Probabilities are very had to predict accurately
- In reality there are a wider range of potential outcomes than the decision tree suggests
3
Q
Give characteristics of a short distribution channel
A
- Industrial products
- Few customers
- Expensive, complex goods
- Infrequent sales
- Bespoke products (custom made)
- Bulky products
- Services
4
Q
Give characteristics of a long distribution channel
A
- Consumer products
- Many customers
- Inexpensive, simple goods
- Frequent sales
- Standard products
- Small products
- Goods
5
Q
Advantages of time based management
A
- It reduces lead times
- customer needs are satisfied quicker resulting in a competitive advantage
- Machinery with more than one function makes it possible to offer a more varied product range
- It can help drive innovation
6
Q
Advantages of technology
A
- Increased productivity and quality
- reduced waste
- More effective and efficient delivery
- More effective marketing
- Reduced administrate and financial costs
- Better communication both internally and externally
7
Q
Disadvantage of technology
A
- Initial costs may be high
- Requires maintenance and constant updating which can be expensive
- May require staff training
- may replace employees which leads to staff redundancies
8
Q
Advantages of capital intensive production
A
- Cheaper than manual labour in long term
- More precise with consistant quality
- Able to work 24/7
- Easier to manage than people
9
Q
Disadvantages of capital intensive production
A
- High set-up costs
- Only suited to 1 task which makes it inflexible
- If machinery breaks down it leads to long delay
- The fear of being replaced may lead to a decrease in motivation
10
Q
Advantages of labour intensive production
A
- Flexible and can be retrained
- Cheaper for small-scale production
- workers have innovation and can solve any problem
11
Q
Disadvantages of labour intensive production
A
- Harder to manage people
- Unreliable (can get sick)
- Need breaks and holidays
- Wages increases meaning that labour costs can increase over time
- Labour costs as a % of turnover are high
12
Q
Characteristic of Quality control
A
- Assumes that errors are unavoidable
- Detects errors and puts them right
- Quality control inspectors check other people’s work and responsible for quality
13
Q
Characteristic of Quality assurance
A
- Assumes that errors are avoidable
- Prevents errors and aims to get it right first time
- Employees check own work, they are responsible for passing on good quality
14
Q
Advantages of TQM
A
- All employees are working together so can bond them as a team
- Boost companies reputation
- lead to fewer faulty products and less waste
15
Q
Disadvantages of TQM
A
- Long time to introduce TQM
- Can demotivate staff
- Expensive and requires training to introduce
16
Q
advantages of budgeting
A
- Helps achieve target
- Controls income and expenditure
- Helps managers review performance
- focus on priorities
- Improves delegation and motivation
- co-ordinate spending
- persuades investors
17
Q
Disadvantages of budgeting
A
- Causes resentment and rivalry if departments have to compete for money
- Can be restrictive
- Time-consuming
- Inflation is difficult to predict some prices can change by levels much greater than the average
- may be inaccurate
18
Q
Advantages of break-even analysis
A
- Easy to do
- Quick
- A forecast of how variations in costs, revenue and profit
- can use breakeven analysis to persuade bank to give them a loan
- decide whether to know a new product
19
Q
Disadvantages of break-even analysis
A
- Assumes variable cost always rise steadily
- For a simple analysis for one product, most businesses do not have only one product
- If data is wrong then results are wrong
20
Q
Advantages of bank loan
A
- guaranteed the money
- The bank will not own any of the business
- interest rates are usually lower than an overdraft
21
Q
Disadvantages of bank loan
A
- Difficult to arrange
- Keeping up with the repayments can be difficult if cash flow is bad
- May have to pay a charge if they decide to pay the loan back early
22
Q
Characteristics of hard HRM
A
- Employees seen as a resource
- Employees are hired on a short term basis
- Managers believe employees are only motivated by money (Contrasted by Heisenberg hygiene factors)
- Appraisals are judgmental
- Training is only done to meet production
23
Q
Characteristics of soft HRM
A
- Employees are the most important resource
- Employees are managed on a long-term basis
- Employees are motivated through empowerment and development
- Appraisals are developmental
- Training is done to meet devlopment needs
24
Q
benefits of high staff turnover
A
- Constant stream of new ideas
- Can recruit staff who have been trained by competitors
- can reduce costs by natural wastage rather than costly redundancy
- Enthusiasm of new staff influences
25
disadvantages of high staff turnover
- Lack of loyal and experienced staff who know the business
- Firm loses staff it has trained often to direct competitors
- Training costs money and productivity drops while staff are getting trained
- Recruitment costs are high
26
Advantages of centralisation
- Business leaders have lots of experience
- Managers get an overview of the whole business so decisions are constant
- Managers are not biased towards one department
- Management can make big decisions quickly because no need to consult anyone else
27
Disadvantage of centralisation
- Not many people are expert enough to make decisions about all departments
- Excluding employees from decision making can be demotivating
- Can react slowly to change
28
Advantage of decentralisation
- Motivate employees
- Employees can use expert knowledge
- Day-to-day decisions can be made quickly
29
Disadvantage of decentralisation
- Junior employees may not have enough experience
- Inconsistencies may develop between departments of a business
- Junior employees may not be able to see overall situation
30
Advantages of internal recuritment
- Candidates already know the business
- Short and cheap process
- Motivates workers
31
Disadvantages of internal recruitment
- Leaves a vacancy in another department
- Can cause resentment
32
Advantage of external recrutiment
- Brings fresh ideas
- Brings experience from other organisation
- Larger number of applicants
33
Disadvantage of external recrutiment
- Long and expensive
- Need a longer induction process
34
Advantage of on the job training
- easy to organize
- Lower cost of training
- training is job specific
35
Disadvantage of on the job training
- trainer and trainee are not productive during training
- Bad practices are passed on
- No new ideas
36
Advantage of off the job training
- Trainers are specialists
- new ideas are bought to the business
- No job distractions
37
Disadvantage of off the job training
- Can be expensive
- No benefit to business while training
- Training might not be specific to their day to day job
38
Advantage of flexible working
- improve motivation so employee productivity should improve
- Flexible working helps employees with day life
- Home working suits families, disabled workers
39
Disadvantage of flexible working
- Can be impractical
- Home workers may be distracted at home
- Job-sharing leads to confusion over responsibilities and unequal workloads
40
Advantages of employee representation
- It is often more effective to approach an organisation as a group
- Collective bargaining can help achieve long-term aims
- Can be helpful for management to have a small representative group
41
Disadvantages of employee representation
- Can lead to industrial action
- Strike action can get out of hand or turn violent
- Can decrease productivity
42
Advantage of ratio analysis
- Good way to look at a businesses performance
- Management can use ratio analysis to help with decision making
- Potential investors can use the ratios to help them decide if they want to invest
- useful to compare ratios with other businesses
43
Disadvantages of ratio analysis
- Internal strengths do not appear in ratios
- External factors are not reflected in the figures
- Future changes e.g interest rate are not shown in ratios
44
Advantages of protectionism
- Countries develop a variety of new industries, adding small local jobs and boosting economical growth
- Allows small businesses to grow as they do not have to compete with multinationals
45
Disadvantages of protectionism
- Prices of imported goods rise due to decreased supply
- Can have a counter by other countries
46
Advantages of open trade
- Countries specialise in what they are good at
- Countries benefit from economies of scale
- More choice and lower prices for consumers
- Developing countries can export goods and increase their living standard
47
Disadvantage of open trade
- Fewer local jobs
- Employee skills are concentrated around certain jobs
- Some countries may use sweatshops and child labour to keep costs down in order to compete internationally
48
Advantages of ARR
- Easy to calculate and understand
- It takes account of all the project's cash flow
49
Disadvantage of ARR
- Ignores the timing of cash flow
- Ignores the time value of money (NPV)
50
Advantage of payback period
- Easy to calculate and understand
- Very good for high tech projects or any project that might not provide long term returns
51
Disadvantage of payback period
- Ignores cash flow after payback
- Ignores the time value of money
52
Characteristics of cost advantage
- A business can get a competitive advantage by selling a similar product at lower cost
53
Characteristics of differentation advantage
- Selling better products at the same or slightly higher price creates a competitive advantage
54
Advantage of Organic growth over external growth
- Can maintain current management style
- Less risk as it is using retained profit
- Easy for business to manage and control how much the business will grow
- Less disruptive changes to workers meaning efficiency, productivity and morale remains high
55
Disadvantage of organic growth over external growth
- Long time
- Market size is not affected by organic growth
- May miss opportunities or more ambitious growth
56
Benefits of innovation
- Can charge high prices
- Improves a firms reputation
- Can help add value to existing products
- Can take advantages of economies of scope
57
Drawbacks of innovation
- Very costly and time consuming
- can end up wasting resources
- May not be able to produce the new product on a large scale at a low enough cost - no guarantee on ROI
- May damage reputation if it is poor quality
