Organisational Structure ( People in business) Flashcards

1
Q

What is growth

A

The increase in the size & status of the business

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2
Q

Why do businesses want to grow

A
  • ECONOMIES OF SCALE (buying in bulk)
  • To expand the company and reach more people
  • Gain popularity
  • There is a demand for the product or service
  • Increase market share
  • To maximise profits
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3
Q

Inorganic

A

Takeover someone else OR merge with someone else

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4
Q

Organic

A

Built the business by themselves

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5
Q

4 types of integration

A

1) Backwards vertical
2) Horizontal (similar)
3) Forward vertical
4) Diversification

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6
Q

Monopoly power

Disadvantage of a Merger

A

monopoly is a business entity that has significant market power, which can lead to higher costs

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7
Q

Advantages of a Merger

A

Economies of scale bigger

More profit enable more research and development

Struggling firms can benefit from new management

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8
Q

Disadvantages of a Merger

A

Increased market share leads to higher prices for consumers because of monopoly power

Larger firms may experience Diseconomies of scale internally is lack of communication, which van be inefficient

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9
Q

Advantages of takeover

A

Increase in sales and sales or revenue

Go into new businesses and markets

Increase market share

Decrease competition

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10
Q

Disadvantages of takeover

A

Conflict with new management

Could be job cuts

Cultural clashes can cause employees to be less efficient

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