Business and Management - Lecture/seminar notes Flashcards

Question

Decision-making skills

Answer 1

Skills for using information to determine how the firm’s resources should be allocated.

Answer 2

- The manager delegates more authority - employees; the leader's role is less dominant, and staff manage their own areas of the business.

Answer 3

- Select workers to perform a task. * Observe them, then note the key elements. * Record the time taken to do each part of the task. * Train all workers to do the task in the quickest way. * Supervise workers to ensure they use this method. * Pay workers on the basis of the results. * SOLE MOTIVATION – MONEY

Answer 4

- Conceptual skills * Interpersonal skills * Technical skills * Political skills

Answer 5

- Minimal statistical evidence. - Each individual may require different needs in a different order. - Some people may require ‘esteem’ needs satisfaction before ‘social’ needs satisfaction. - Self-actualisation might not be for everybody.

Answer 6

Helps managers understand the behaviour of their employees. Helps managers to provide the right financial and non-financial motivation for their employees. Helps to increase efficiency, productivity and profitability.

Answer 7

Improving and sustaining organisational performance Productivity Driving quality High performance working Organisational agility Well-being

Answer 8

Work-life balance Identifying talent and potential Individual needs and capabilities Preventing poor performance from escalating Problem resolution Punctuality and attendance

Answer 9

- Peoples differences are valued - Everyone feels they belong without having to conform - Fair policies and practices enable a diverse rangle of people to effectively work together.

Answer 10

- not enough women + non-Caucasians in promiennt positions at the workplace - More social training was provided for people in management levels -> Case came where all groups had to learn from other groups, not one group learning about all other groups - Diversity and inclusivity has grown -> As workforces have became more globalised ## Footnote (Week 3 Lecture)

Answer 11

- Some companyies involved just to be a part of recognised Diversity Management lists, and to meeting govt. quotas - Quota policies may have effective in short-term - Some people feel they are being unfairly dismissed -> To meet company quoatas -> Became form of exclusion or 'reverse discrimination' + Some workers feel 'tokenised' - Some critics argue it should purely be based on merit, not factors e.g. race or creed - Tension may be caused by employees as ethnic groups may be hired, but some may this is to meet quotas -

Answer 12

- More views etc - Equality Act (2010) -> Gives everyone the right to be treated fairly ## Footnote (Week 3 Lecture - 2024)

Answer 13

- Diverse workforce needs an inclusive environment - Managing diversity is a continuous process of improvement - Merit basis of all decisions for recruitment and development - Being alert to the influence of conscious and unconscious biases.

Answer 14

- Develop open culture for good communication channels - Ensure appropriate channels foremployees' voices, different groups can access them easily ## Footnote (Week 3 lecture - 14/10/2024)

Answer 15

- Regularly audit, review and evaluate progress - Use employee surveys -> To see if policies work for all - Network with others inside and out the organisation -> To keep updated and to share learning - ## Footnote (Week 3 lecture - 14/10/2024)

Answer 16

- What % improvement is required? How much support is there for quota policies? - How can quota policies be communicated or improved? - How to best to implement policies and create appropraiate legal adn organisational requirements

Answer 17

- Health checks - Health insurance protection - Personal safety training - Conflict resolution training - Training line managers etc ## Footnote (Week 3 Lecture - 14/10/2024)

Answer 18

- Clear missions and objectives building trust - Coporate social responsibility (CSR), community investment, volunteering etc

Answer 19

- Workers’ involvement in the decision-making process

Answer 20

- Performance development plans (PDPs) - Open and collaborative culture * Innovation workshops

Answer 21

- Retirement planning - Employee financial support - Employee assistance programmes which offer debt counselling

Answer 22

a systematic arrangement to achieve specific purposes

Answer 23

ownership, size, industry, objectives and stakeholders.

Answer 24

- An individual within a group or an organisation who wields the most influence over others -

Answer 25

- The process whereby one individual influences other group members toward the attainment of defined group or organisational goals

Answer 26

- Leaders are primarily responsible for establishing a mission - Managers primarily responsible for implementing that mission through others

Answer 27

Technical expertise - Clarification of goals and objectives - Problem solving - Imagination and creativity

Answer 28

- (1930s-1950s) Personality - (1960s) Behaviour - (1970s) Focuses on situational variables - (1980s) Emergence of the 'new paradigm'

Answer 29

- Personality-based - Situational - Transactional - Transformational

Answer 30

- Personality * Dominance and personal presence * Charisma * Self confidence * Achievement * Ability to formulate a clear vision

Answer 31

- Vision and articulation - Sensitivity to others’ needs - Environmental sensitivity - Unconventional behaviour - Taking personal risks - Upsetting the status quo

Answer 32

- When an organisation's leader or manager must adjust their style to fit the followers' development level. | Directing (dependent) -> Coaching -> Delegating (independent)

Answer 33

- Insight - Flexibility - Trust - Problem solving - Coach

Answer 34

- When leaders promote compliance by followers, via punishments and rewards

Answer 35

- Focuses on short-term goals * Favours structured policies and procedures * Thrives on following rules and doing things correctly * Revels in efficiency * Tends to be inflexible * Opposes change * Focusses on management of organisation * Manages current issues and problems.

Answer 36

- Motivates followers by appelaing to their self-interest - Exchange process -> e.g. business owners exchange status and wages for thw work effort of employee - Focuses on acheiving business goals and having good relations with workers, in exchange for desirable rewards - Encourages leader to adapt their style and behaviour to meet followers' expectations

Answer 37

- Leader wants to be in control - Short-term relationships - When there are approaching deadlines that must be met.

Answer 38

- leadership approach that causes change in individuals and social systems enhances the motivation, morale and performance of followers through a variety of mechanisms

Answer 39

- Very well-organised and expect their followers to be creative. * Team-oriented and expect followers will work together to create best possible results. * Respected and, in turn, respects followers. * Acts as team coach . He or she provides training and motivation to reach the desired goals. * Responsible for team, but also delegates responsibility to team members. * Engenders respect through rapport and personal influence.

Answer 40

Charismatic and visionary. * Inspire followers to transcend their self-interest for the organisation. * Appeal to followers' ideals and values. * Inspire followers to think about problems in new or different ways. * Common strategies used to influence followers include vision and framing

Answer 41

When leaders want members to be an active part of the organisation and have ownership to it. * When leaders are building a sense of purpose. * When the organisation has a long-term plan. * When people need to be motivated.

Answer 42

- Delegating - Supporting - Coaching - Directing

Answer 43

- Insight * Flexibility * Trust * Problem solving * Coach

Answer 44

- Transactional promotes complaince via punishments and rewards - Transformational keeps employees motivated in the short term via punishments and rewards

Answer 45

- The organised effort of individuals, in order to provide and produce goods and services to meet the needs of society.

Answer 46

➢profit making (e.g., manufacturers, retailers, transport and banks). ➢non-profit making (e.g., schools, hospitals and charities). ## Footnote (Some non-profit organisations are a combination of profit making and non-profit making ventures)

Answer 47

income generated from profit related activities can then be used to to reinvest in the organisation e.g. business expansion and R&D

Answer 48

- Different contexts of business and different elements are still interrelated + It can still operate in the way you want it to (depending on how it is looked at)

Answer 49

- Organisation -> Strategy -> Activities - Environment

Answer 50

▪ Production ▪ Sales ▪ Marketing ▪ Customer Service ▪ Administration ▪ Research and Development (R&D) ▪ Finance

Answer 51

- Consists of overall aims and objectives - Usually strategy is determined by the senior management of the business (After careful analysis of stakeholders, business, environment and how things are managed). Strategic decisions will determine the overall direction of the business, taking into account its capabilities and constraints.

Answer 52

- A business considers how it wants to be seen in the marketplace - Overall strategy of business is achieved via collective performance of various activities and functions within the business

Answer 53

Inputs - Materials, Labour, Methods, Finance, Tech Process - Strategy Formulation, Innovation, Operations, Marketing, HR management, Finance Goods/Services - Profit, Waste, Information, Job (dis)satisfaction, Economic Growth

Answer 54

- Manufacturing goods ▪ Distributing products ▪ Selling goods to customers ▪ Advertising and promoting products ▪ Maintaining records of income and expenses ▪ Managing the workforce ▪ Dealing with customer queries and complaints ▪ Developing and creating new products

Answer 55

- Political - Economic - Social - Technological - Legal - Environmental

Answer 56

▪ Integrated transport systems ▪ Improved communication ▪ Flexible production ▪ Lower distribution costs ▪ Common business language ▪ Currency markets ▪ Legal systems ▪ Market potential

Answer 57

- Social mobility - Employment flexibility - Common business culture - Customer diversity - Shared knowledge and skills - Employee relations strategies - Social media growth

Answer 58

- The global circulation of goods, services and capital, but also information, ideas, and people - Albeit with large cyclical variations | (Has become more priminent in recent decades)

Answer 59

- World Trade Organisation (WTO) ▪ Leading stock markets ▪ Central banks ▪ Regional trading blocs

Answer 60

- World economy is now more interrelated - Increased international trade and more multinational corporations (MNC’s). - Improved tech allows better communication. - Increased flow of business resources e.g. goods, services, workers etc. - More international trade and MNCs.

Answer 61

- (1700s) Steam - (1800s) Electricity - (1900s) Computing - (Today) Connected

Answer 62

- More investment in -> joint ventures (JV’s), mergers and acquisitions (M&A’s) and multinational corporations (MNC’s). - Better R&D from increased sharing of innovation - More business may manufacture in overseas countries

Answer 63

- Growth of international trade ▪ Spread of international governance ▪ Finance and capital spread ▪ Technological innovation ▪ Diffusion of information and communication technology

Answer 64

- Growth of Foreign Direct Investment (FDI) - Increased multinational corporations (MNC’s) and multinational enterprise - Improving cost efficiencies - Innovation - Saturated home markets

Answer 65

- Principle is in synergy, growth and intangible assets (human, customer and structural capital) | (2 + 2 = 5) ## Footnote (key principle behind buying a company is to create shareholder value over and above that of the sum of the two companies)

Answer 66

- Happens when a business expands its own operations rather than relying on takeovers and mergers.

Answer 67

- Increasing production from in the business -> Internally increasing productive capacity

Answer 68

- External growth – through joint ventures (JV’s) mergers - Acquisitions/takeovers (M&A’s)

Answer 69

- When two or more companies agree to pool resources to accomplish a specific task (partnership). - This often occurs with a local business to enter a foreign market.

Answer 70

- Joining together of two or more firms under common ownership or more firms join together to become one. - Multiple companies agree to integrate their operations into a single entity in which there is shared ownership, control and profit | (Mergers are mutual!)

Answer 71

- When a firm buys control of another, when one company buys another company. - This can be done either by the purchase of the assets of the company or by acquiring ownership over 51% of its paid-up share capital | (Does not need to be mutual!)

Answer 72

- Finding new markets (i.e., exporting). - Growing a customer base through marketing. - The advantages of economies of scale: large scale production results in lower unit (average) costs (cost per unit). -

Answer 73

- Managerial - Risk-bearing - Financial - Technical - Marketing - Purchasing

Answer 74

- Location/Transport links - Skilled Labour - Organisation Infrastructure - Reputation of Area

Answer 75

- Strategic rationale - control in the chosen sector - Speculative rationale - Management failure rationale - Financial necessity - Political rationale

Answer 76

- A requirement for specialist skills and/or resources. - National and international stock markets. - Globalisation drivers + Diversification drivers. - Industry and sector pressures. - Capacity reduction + Vertical integration. - Increased management effectiveness and efficiency. - To acquire a new market or consumer base. - To buy into a growth sector. ## Footnote (In essence, the motives of cost, profit, market power, risk and management).

Answer 77

- Two companies that are in direct competition and share the same product lines and markets. - Branding may be an interesting consideration here - Process of communicating a unique selling proposition, such as logos and mascots, which sets a product or service apart from its competition | (For example, two car manufacturers or drinks suppliers)

Answer 78

- involves acquiring a business in the same industry but at different stages of the supply chain -> (supply chain describes the process by which production and distribution gets products to the final customer) | (Different stages up and down...) ## Footnote For example, a supplier and a company: Film distributors owning cinemas. Brewers owning/operating pubs (forward vertical) or buying hop farms (backward vertical). Drinks manufacturers integrating with bottling plants

Answer 79

- When a company buys another firm in an unrelated industry - Two companies that have no common business area ## Footnote For example: Samsung – the electronics giant also makes military hardware, apartments, ships and they also operates a Korean amusement park! Facebook buys WhatsApp

Answer 80

- Mislead value for investment - Lack of clarity in the integration process - Mismatch in culture - Poor communication - External factors - Negotiation errors

Answer 81

- Generation of economies of scale. - Lower costs passed onto consumers through lower prices. - Higher profits invested into new R&D + new tech + new products/services. Increased scope of global competition (more exports) - Higher shareholders return/profit. - Large firms have better access to funding (capital markets) than smaller ones, why? - Higher scope for more govt. tax revenues, + better merit and public goods from higher tax revenue.

Answer 82

- Diseconomies of scale, decreasing returns to scale, law of diminishing returns + Opposite of economies of scale! - Benefits may not occur in the long term - Cost savings may not materialise, or passed onto consumers - Creation of monopoly or oligopoly could lead to consumer exploitation. - Attract interest and investigation from Competition & Markets Authorities (CMA)

Answer 83

- Return on capital employed (ROCE) - earnings per share (EPS).

Answer 84

- indicates how well a business uses its capital (or the assets purchased with the capital) to generate profits. - Being a percentage makes it easy to compare the ROCE of different companies. | (Formula: Profit before interest and tax/avg. capital employed x 100%) ## Footnote (PBIT stands for Profit before interest and tax)

Answer 85

- Determines the profits available to ordinary shareholders, expressed per share. - Profits after interest, tax and preference share dividends - Number of ordinary shares issued

Answer 86

- This figure states only earnings per share that each owner of ordinary shares might expect to receive. - The directors decide whether/how much to pay out as a dividend. - Furthermore, to calculate a rate of return for the shareholder, the price that the potential shareholder has to pay to acquire a share must be taken into account. - The main weakness of both ROCE and EPS is that they do not correlate directly to the goal of maximising shareholder wealth.

Answer 87

- PAT/number of ordinary shares ## Footnote (PAT stands for profit after interest, tax and preference share dividends)

Answer 88

Profit before interest and tax / Avg. capital employed (x100%)

Answer 89

- To increase market share. To secure cheaper premises and labour. Employment and Health & Safety legislations in other countries may be more relaxed. To avoid or minimise the amount of tax to be paid. To take advantage of government grants available. To save on costs of transporting goods to the market place. To develop an international brand.

Answer 90

- Smart market entry and expansion - Winning MNCs tend to begin in a mature market and then expand outward (for example, many companies enter Nigeria before expanding into western African markets). - Flexible approach to launching or expanding businesses (JVs, M&As, franchises etc.). - Innovative products and pricing - Products that are right for local consumers and the local environment. - An intimate understanding of consumers and how to meet their needs - Keen understanding of customers in individual markets. - Brand loyalty can be far stronger in emerging markets.

Answer 91

Pros: - Job Creation: MNCs bring employment opportunities to host countries. - Capital Investment: They infuse significant financial resources into local economies. - Technology Transfer: MNCs introduce advanced technologies to developing markets. - Improved Trade Balance: Their operations often enhance the trade balance of host nations. Disadvantages: - Repatriation of Profits: Profits are often sent back to the MNC's home country, reducing the financial benefits to the host. - Job Displacement: Technological advancements can lead to unemployment in local markets. - Environmental Concerns: Their operations may contribute to ecological damage and societal issues.

Answer 92

- Fast and widespread delivery of goods - Inadequate transportation infrastructure is a common issue. - Successful MNCs have found creative ways to distribute in rural areas (for example, develop their own distribution networks). - A focus on tackling the talent agenda MNCs invest in attracting and developing local talent at all levels. - Programmes to encourage the personal growth and long-term success of employees. - Strong stakeholder engagement - Strong relationships with local and regional governments and other community stakeholders. - Align their activities with the sustainable-development goals of local leaders. - Embed corporate social responsibility into their strategies.

Answer 93

1. Nearly 1/3 of Fortune Global 500 companies from G20 countries. 2. The rise of emerging market multinational corporations (eMNCs) is reminiscent of the emergence of US companies after World War II. 3. The rise of eMNCs overall could threaten the dominant position enjoyed by the G7 MNCs. 4. Banking, cars, crude oil production, engineering and construction, logistics, metals, mining, petroleum refining and telecom. 5. Profit margins for eMNCs are still lower than those of their developed market counterparts in the G7. 6. Emerging MNCs learned to compete with Western MNCs in their home markets. 7. By 2025, annual consumption in emerging markets will reach $30 trillion – the biggest growth opportunity in the history of capitalism.

Answer 94

- A SWOT analysis is a technique used to determine and define Strengths, Weaknesses, Opportunities and Threats SWOT. - SWOT analyses can be applied to an entire company or organisation or individual projects within a single department.

Answer 95

1. Microsoft (US); CEO - Bill Gates 2. Nestle (Switzerland); CEO - Ulf Mark Schneider 3. Pepsi (US); CEO - Ramon Laguerta 4. Hewlett Packard (US); CEO - Enrique Lores 5. Coca-Cola (US); CEO - James Quincey

Answer 96

- A multinational corporation is a company that operates in its home country, in addition to other countries around the world. + It has one central office in one country -> Co-ordinating management of other offices

Answer 97

- Profits - New markets - Financial capital - Raw materials - Labour costs

Answer 98

- This managerial control allows firms to decide how and where to employ resources - Decisions are based on global strategies for corporate success rather than the strategies of one country - MNCs highlight tensions in an economy -> Or political tensions -> Which may reflect exclusive national territories

Answer 99

- Transnational Corporation (TNC) -> operate on a borderless basis -> usually not identified with one national home-> e.g. (McDonald’s & Apple) - Ethnocentric: operate with strict headquarter control over foreign operations -> and expect to operate abroad as they do at home -> e.g. (Sony, Panasonic, Harley-Davidson & Hitachi)

Answer 100

- Polycentric -> give foreign operations more freedom, respect market differences amongst countries -> treating them as separate domains in the process -> e.g. (Phillips & John Deere) - Geocentric -> seek total integration of global operations without ‘home country’ prejudices -> using senior executives from many countries -> e.g. (McDonald’s, KFC & Viacom)

Answer 101

Pros: - MNCs ship capital to where it is scarce. - They transfer technology and management expertise from one country to another. - They promote efficient allocation of resources in the global economy Cons: - MNCs may be viewed as instruments of ‘capitalist domination’ * MNCs control critical sectors of their hosts’ economies. * They make decisions about the use of resources, with little regard for host country needs. * They weaken labour and environmental standards

Answer 102

- They are the primary drivers and beneficiaries of globalisation

Answer 103

- High asset turnover * Network of branches * Control + Continued growth * Sophisticated technology + Highly skilled * Aggressive marketing and advertising

Answer 104

Enhanced investment in host country. * Tax revenue for home country. * R&D becomes a potentially profitable venture. * Large international companies create a lot of jobs for the global economy. * Companies can provide consumers with better consistency when they exist internationally. | (R&D is Research and Development)

Answer 105

- Preferential treatment over local industry. - Loss of jobs at home. - The presence of MNCs creates monopoly-building opportunities. - Environmental concerns can develop with the presence of MNCs

Answer 106

- Extraction of excessive profits. - Domination of the economy. - Interference with the government at many levels. - Failure to assist domestic firms in their development. - Hiring the best local personnel leaving domestic firms disadvantaged. - Failure to transfer advanced technologies.

Answer 107

- Limitations placed on profit making. - Resources are often overpriced. - Rules are exploited by the host government and companies. - Restrictions are applied to foreign exchange. - Failure to meet contract obligations.

Answer 108

- Vertical integration: stable supply chains + Horizontal integration: economies of scale - Technological change: improved ability to control operations in other nations. - Exporting/Importing. - Licensing: gives local firms right to manufacture their products in exchange for a fee. - Franchising: the firm provides sales or service strategies -> in exchange for fees

Answer 109

- Global economic growth + Liberalised financial markets - Security of investment +Liberal trade barriers - Maximise shareholder and stakeholder wealth

Answer 110

- To seek access to new markets; - To grow beyond a small domestic market - To achieve cost and other competitive advantages over competitors ## Footnote (Foreign Direct Investment (FDI) is an international capital flow undertaken by an MNC)

Answer 111

Greenfield - a brand new facility is established in the host country. Brownfield – an existing facility in the host country. Also known as a Merger and Acquisition (M&A).

Answer 112

Pros: - Provides finance + tech to developing nations - Promotes stable long-term lending + Diversifies investors' problems Cons: - Unethical access to local markets - Not suitable for strategically important industries - Investors may have less moral attachment

Answer 113

Advantages: * Savings are put to more productive uses. * Risk sharing is beyond what is possible domestically. * Domestic recessions can be minimised by borrowing. * Costs of capital are lowered.

Answer 114

- Sometimes capital is not used wisely. - Foreign capital may leave quickly and cause financial volatility in the process. - Difficulty in taxing profits - MNCs shift to avoid. - Capital control effectiveness decreases

Answer 115

-> This is an extension of market research which seeks to identify targeted groups of consumers - to tailor products and branding -> By determining which products have the best chances of gaining a share of the target market -> clear objective is to minimise any form of risk. -> Then, the company can increase its overall efficiency -> achieved by focussing limited resources on efforts that produce the best return on investment.

Answer 116

- By attribute. - By benefit. - By user or application. - Competitor positioning. - By product category. - By quality or price.

Answer 117

- where a business targets a smaller segment of a larger market, where customers have specific needs and wants

Answer 118

- Less competition – the firm is a ‘big fish in a small pond’. - Clear focus - target particular customers (often easier to find and reach). - Builds up specialist skill and knowledge = market expertise. - Can often charge a higher price – customers are prepared to pay for expertise. - Profit margins often higher. - Customers tend to be more loyal.

Answer 119

- Lack of economies of scale (these are lower unit costs that arise from operating at high production volumes). - Risk of over dependence on a single product or market. - Likely to attract competition if successful. Vulnerable to market changes – all ‘eggs in one basket’

Business and Management - Lecture/seminar notes Flashcards

(From slides/readings)