Theme 3 - 3.4.1 - Corporate Influences Flashcards
What are corporate timescales ?
Corporate timescales refers to strategy and the expectation of when a return will be achieved - so when you make an investment and take on a business venture then its the expectation when you make the money form your investment back
What are the 2 Corporate Timescales ?
Short-termism and long-termism
What is Short-termism ?
It means that a business is only interested in a quick financial award
For example the business may be focussed on monthly profit figures or quarterly sales figures instead of being focused on actual building your business as a brand - focusing on ethics, your employees and not just focusing on profit maximisation etc
Short-termism is choosing a course of action which is best in the short term but may be critical in the long term - as you are just looking for quick money so if you do something to make a quick buck but later on you would get backlash from consumers
Short termism comes form history where we didn’t live long enough to worry and thought just about overspending drugs etc so we just want to make quick money and make a good life as we might die soon
As CEOs in MNCs typically only last 6 years in the role
A short term attitude by a buisness is a focus on short term ROI
Instead they should be looking to invest in research projects that will give them a competitive advantages - for example going through R&D and making a product with a USP to gain competitive advantages - this is more long term
Short termism makes businesses fail to innovate and stagnate
What is Long termism ?
Long-termism is a whole business approach:
- Incorporates CSR - corporate social responsibility - so considering the social aspects of the business so that the consumers are more happy with the business - better brand image - maybe more brand loyalty
- Considers ethical behaviour of the business in decision asking - this again builds brand image but its long term as it might lead to more sales over time but in the short term it doesn’t really relate to any profits
- Staff development is seen as a long term objective of the business, to retain and develop staff - again this would over time build your brand image as less absenteeism and also if you slowly build your staff etc then production and motivation would increase - efficiency etc as the workers feel like part of the team
- Long term technology investments secure data for the future
What is evidence base decision making ?
Decisions relating to the business are based on evidence and data which is valid and trusted information - so when you take a business risk etc - you base it on data
Decisions should be based on a combination of critical thinking and the best available evidence
Decisions are made using evidence form multiples sources to increase the probability of a favourable outcome
What is the evidence in evidence based decision making ?
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
What are the 5 steps of evidence based decision making ?
Step 1 - Ask - translate a problem into a question
Step 2 - Aquire the evidence - to make a decision
Step 3 - Appraise the evidence - is the evidence relate to the problem so for example if the problem is depression in schools etc then you can take a classroom and do a focus group - is this representable of a whole school ? Not really
Step 4 - Apply the evidence to the problem
Step 5 - Assess the outcome of the decision
What is Subjective Decision making ?
Decisions relating to a business which are based on personal perspectives, feelings and opinions
• Radio 4 podcast on film awards being entirely subjective decisions e.g. film industry is big business in the UK and awards may convince customers to go and see a film, but a small committee of unelected members decides who
wins the BAFTAS
