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business mock 3 > influences on business decisions > Flashcards

influences on business decisions Flashcards

1
Q

what are corporate timescales?

A

a strategy and expectation of when a return will be achieved

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2
Q

what is short termism?

A

when quick, reactive decisions are made in order to make quick financial reward

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3
Q

what is long termism?

A

strategic approach, in which the time period where decisions have an impact on the vision, mission and objectives of the business

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4
Q

advantages of short termism?

A
  • reactive to external issues
  • resolve
  • progress can be measured / managed
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5
Q

disadvantages of short termism?

A
  • long term profitability may be threatened (failure to invest in r&d)
  • short term contracts can lead to a higher cost in resources + harder to recruit
  • fail of investment = loss in market share
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6
Q

advantages of long termism?

A
  • all strategic elements considered e.g., ethics
  • consider organic growth
  • more likely to invest in R&D, products, innovation (comp advantage)
  • interested in recruiting high quality staff, training them, building loyalty and retaining them
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7
Q

disadvantages of long termism?

A
  • could be just for a good rep, greenwashing
  • commercially prudent. may lack right intention
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8
Q

evidence based decision making?

A

decisions relating to business are based on evidence and data which is valid and trusted info

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9
Q

subjective based decision making?

A

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

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10
Q

advantages of evidence based?

A
  • based on facts
  • internal promo awarded to employee w high productivity rates
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11
Q

disadvantages of long termism?

A

may lack context

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12
Q

advantages of subject based?

A
  • context considered
  • effective if lack of current, accurate info relating to decision
  • good if leader is experiences and trusted
  • useful for quick decisions
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13
Q

disadvantages of subject based?

A
  • could be considered unfair, internal promo could be if managers is friends w them and like them
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14
Q

what is corporate culture?

A

values, attitudes, beliefs, meanings and norms shared by people within an organisation

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15
Q

advantages of strong corporate culture?

A
  • provides sense of identity for employees
  • workers identify w other employees
  • increases commitment to company
  • motivates workers, increases productivity
  • reinforces values of organisation
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16
Q

factors defining strong/weak culture?

A
  • artefacts
  • ceremonials
  • courses
  • heroes of business
  • stories/myths
17
Q

classification of company cultures?

A
  • power: central source of power responsible for decision making
  • role: decisions made through well established rules and procedures
  • task: power given to those who can accomplish tasks
  • person: to support individuals that don’t work close together which have good expertise
18
Q

how is company culture formed?

A
  • personalities and beliefs of founding members of an organisation
  • environmental factors e.g., history / heritage
  • types of product produced
19
Q

difficulties in changing established culture?

A
  • identifying factors that contribute to culture and their significance is difficult
  • harder to manipulate people’s attitudes / beliefs
20
Q

what is a stakeholder?

A

person, group or organisation that can be affected or affect the organisation’s actions, objectives and policies. e.g., directors, employees, owners, suppliers, customers.

21
Q

what are internal stakeholders?

A

groups of people inside the business which have a direct interest in its survival and wellbeing. e.g.,
- business owners
- employees
- managers and directors

22
Q

what are external stakeholders?

A

a range of groups outside a business which may have an interest in its activities. e.g.,
- shareholders
- customers
- creditors
- suppliers
- community
- gov
- environment

23
Q

what are the stakeholder objectives?

A
  • shareholders: max shareholder value
  • employee: higher profitable business, higher wages
  • customers: good quality products at fair price
  • suppliers: treated fairly, long term contracts, regular orders
  • community: contribute to well-being of community, be good corporate citizens
  • gov: businesses to grow and more profitable
  • environment: avoid neg impact on environment
24
Q

what should corporations do for stakeholder influences, stakeholder approaches?

A

(the business considers all of its
stakeholders in its business decisions/objectives)

  • recognise interests of other stakeholders
  • maintain open communication
  • ensure benefits are distributed fairly
  • minimise adverse effects of business
25
Q

stakeholder influences, shareholder approach

A

businesses should focus purely on shareholder returns (increasing share price / dividends) in its business decisions / objectives

26
Q

The potential for conflict between profit-based
(shareholder) and wider objectives (stakeholder)

A
  • SH & employees:
    meeting objectives e.g., higher wages, bonuses, perks- which are all a cost, if met there will be a neg impact on profit and dividends
  • SH & customers:
    if prices are charged too high, it will boost SH returns but reduces purchasing power of customers
  • SH & managers:
    may prioritise own objectives e.g., max salary, benefits, which can allow profits to suffer if too high
  • SH & environment:
    in effort to max profit, a business may neglect responsibility towards environment
  • SH & gov:
    caused if businesses break laws, if tax pay is reduced then SH will have larger profits but gov will be criticised
27
Q

what are ethics?

A

the moral rights and wrongs of a decision focusing more on a strategic level rather than decisions made by e.g., individual employees

28
Q

ethics of strategic decisions?

A
  • environment
  • animal rights
  • workers in developing countries
  • corruption
  • product availability
29
Q

what is CSR?

A

a business assessing and taking responsibility for its effects on the environment and its impact on social welfare

30
Q

what are ethical codes of practises?

A

statements about how employees in a business should behave in a particular way where ethical issues arise

31
Q

advantages of a csr approach?

A
  • happy customers (more loyal)
  • happy staff (more motivated, proud)
  • happy investors (more funding)
  • cost reduction (no re-hiring staff, loyal customers)
32
Q

disadvantages of a csr approach?

A
  • fad: phase in which customers will move on from
  • motive: only for good pr
  • cost: if comp advantages isn’t gained, then extra unnecessary cost
33
Q

pay and rewards (purposes)?

A
  • attract employees w right skills, experience, knowledge
  • rewards and motivate existing staff
  • maximise productivity levels
34
Q

advantages of trade offs between profit and ethics?

A
  • marketing e.g., present ethical stance
  • cab act as the equivalent of insurance policy
35
Q

disadvantages of trade offs between profit and ethics?

A
  • raise costs e.g., paying above min wage
  • reduce rev e.g., not using bribery

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