Influences on business decisions Flashcards
What are characteristics of short term decision making?
- low investment into research and development
- low investment into training
- low short term profits
- external growth over organic growth
- lots of short term contracts
What are the disadvantages of short term decision making?
- Over reliance on short term contracts
- low long term productivity
- low competitive edge overseas
What are the characteristics of long term decision making?
- innovative
- invests in research and development
- long term contracts
- recruits high quality staff and trains them
What is evidence based decision making?
a systemic and rational approach to researching and analysing all available information before a conclusion is reached.
What is subjective based decision making?
Where personal opinions of the key decision maker strongly influence the course of action chosen
Who are internal stakeholders?
- Business owners
- Employees
- Managers and directors
Who are external stakeholders?
- Shareholders
- customers
- government
- environment
- local community
- suppliers
What is a stakeholder approach to decision making?
To recognise interests and maintain open communication in order to minimise or eliminate adverse effects
What is a shareholder approach to decision making?
When the objectives of shareholders are the most important influence on decisions
What is divorce of ownership and control?
Shares held by a large number of different share holders where no single share holder has any significant control
What are ethics?
To consider the moral rights and wrongs of a decision at an often strategic level
What is corporate social responsibility?
A business that assesses and takes responsibility for its effects on the environment and social welfare
