Corporate influences

Question 1

Define corporate timescales.

Answer 1

Corporate timescales refers to strategy and the expectation of when a return will be achieved

Question 2

What is short-termism?

Answer 2

Short-termism means that a business is only interested in a quick financial reward

For example the business may be focussed on monthly profit figures or quarterly sales figures

There are arguments that investors are only looking for short-term profit returns rather than building companies that employees can be proud of

Question 3

What are the historical roots of short-termism.

Answer 3

Short-termism is choosing a course of action which is best in the short term, but may be critical in the long-term

This comes from history where we didn’t live long enough to worry and thought just about the present – overspending, smoking and drug abuse are examples of that in modern day attitudes

CEOs in MNCs typically only last 6 years in the role*

Question 4

Explain lack of development in short-termism.

Answer 4

A short-term attitude by a business is a focus on short-term returns on investments

Instead they should be looking to invest in research projects that will give the business the competitive advantage

Short-termism makes businesses fail to innovate and stagnate

Question 5

What is long-termism?

Answer 5

Long-termism is a whole business approach:

• Incorporates CSR (Corporate Social Responsibility)
• Considers ethical behaviour of the business in decision making
• Research and development have long term goals
• Staff development is seen as a long term objective of the business, to retain and develop staff
• Long-term technology investments secure data for the future

Question 6

What is evidence-based decision making?

Answer 6

Decisions relating to the business are based on evidence and data which is valid and trusted information

Decisions should be based on a combination of critical thinking and the best available evidence

Decisions are made using evidence from multiple sources to increase the probability of a favourable outcome

Question 7

What evidence might be used in evidence-based decision making?

Answer 7

Evidence used in decision making in a business could be;

• The outcome of scientific research e.g. use of chemicals in production processes
• Organisational facts and figures e.g. annual report
• Benchmarking with competitors e.g. car companies sharing ideas

Question 8

What are the five steps of evidence based decision making?

Answer 8

Step 1: Ask – translate a problem into a question

Step 2: Acquire the evidence

Step 3: Appraise the evidence

Step 4: Apply the evidence to the problem

Step 5: Assess the outcome of the decision

Question 9

What is subjective decision making?

Answer 9

Decisions relating to a business which are based on personal perspectives, feelings and opinions