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Business > Theme 3 AO1 > Flashcards

Theme 3 AO1 Flashcards

1
Q

What is a strong culture in a business?

A

Strong cultures have good communication and have a strong focus on their core values

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2
Q

What is a weak culture?

A

A weak culture demonstrates bad customer service, lack flexibility in demand and have a demotivated workforce.

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3
Q

Average rate of return formula (ARR)?

A

(Average annual profit/ Capital cost of investment) x100

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4
Q

Define synergy

A

When agents work together to produce something greater than the simple sum of its parts.

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5
Q

What is a vertical integration?

A

When a firm merges with another firm that is not part of the same stage of production

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6
Q

What is backwards vertical integration?

A

merging with a firm that is closer to the primary stage of production.

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7
Q

What is forwards vertical integration?

A

merging with a firm that is closer to the tertiary production stage

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8
Q

What is horizontal integration?

A

When a firm merges with another firm at the same stage of the production line.

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9
Q

What is a conglomerate merger?

A

A firm merging with a firm from a completely different industry.

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10
Q

What is the difference between a merger and a takeover?

A

Takeovers are more hostile

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11
Q

What does PESTLE stand for?

A

Political, Economic, Social, Technological, Legal, Environmental.

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12
Q

What are the objectives of growth?

A

Achieving EOS, Increase market power over suppliers, Increase market share and brand recognition, Increase profitability.

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13
Q

What are some problems that may arise with growth?

A

Diseconomies of scale, Worsened internal communication, Overtrading.

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14
Q

What are 5 reasons why a business would want to complete a merger or takeover?

A

Achieve synergy, Gain knowledge of the market, Access EOS, Aquire assets, Gain market share.

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15
Q

What is the difference between organic and inorganic growth?

A

Organic growth is when a business expands internally where as inorganic growth is when a business expands by using other businesses.

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16
Q

What is an example of organic growth?

A

Opening new locations and employing more staff.

17
Q

What is an example of inorganic growth?

A

Mergers and takeovers.

18
Q

What are three advantages of growing organically?

A

Businesses can use retained profit, they will grow at a sustainable rate, easier to avoid the principal-agent problem.

19
Q

What is the principle agent problem?

A

When owners do not control what happens and the managers do instead.

20
Q

What are three disadvantages of organic growth?

A

Rivals may opt for inorganic growth to grow faster, Hard to build market share if they are already leading, Takes more time.

21
Q

What is HANDY’s Power culture?

A

There is a central figure that makes decisions. There is a competitive attitude amongst employees to gain power.

22
Q

What is HANDY’s Role culture?

A

Decisions are made through rules and procedures and power comes from higher hierarchal status. It is bureaucratic and there is usually a lot of paperwork involved.

23
Q

What is HANDY’s Task culture?

A

It focuses on completing project. Power comes from those with expertise and knowledge. It involves a lot of teamwork.

24
Q

What is HANDY’s Person culture?

A

People of similar expertise are grouped together. These all work on a client to client basis rather than a project to project basis.

25
Q

How is corporate culture formed?

A

Role models (founders), Mottos, Norms and values, Artefacts (uniforms).

26
Q

What is the labour productivity calculation?

A

Total output/ Number of workers.

27
Q

What does the labour productivity calculation measure.

A

How efficient each employee is on average.

28
Q

What is the labour turnover calculation?

A

(Number of employees/ Average number of employees) x 100

29
Q

What is the absenteeism calculation?

A

(Number of work days lost through absence/ Total possible days worked) x100

30
Q

In regard to corporate culture, Define surface manifestation.

A

Visible, tangible elements of a corporate’s culture that can be noticed by an outsider.

Business (12 decks)

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