topic 6 - internal factors Flashcards
describe finance
all organisations need finance in order to acheive their objectives. the following are possible situations that may arise due to budget contraints and no availability of finance to rectify the situation:
- the organisation may not be able to implement decisions and take the courses of action it wishes to, such as expanding the business by developing new products and offering wage rises to motivate staff.
- the organisation may have to take dramatic action to cut costs such as making staff redundancies or removing a layer of management.
describe how managers can impact a business
levels of risk - sometimes managers go for the ‘safe’ option which won’t necessarily meet the objectives of the business, such as maximising profits. On the other hand, some managers take too much risk and when things go wrong, put an organisation into financial difficulties.
experience and expertise - a good manager can lead and motivate a team to success, while a bad manager can cause low morale, a high turnover of staff and a drop in productivity.
describe how employees can impact a business
training - a well-trained employee fulfils their role efficiently and is an asset to the company; a badly trained one can be incapable of performing basic functions, such as interacting with customers and is detrimental to the organisation.
morale - employee morale needs to be high as, if morale is low, it could impact on the performance levels of staff, increase staff absenteeism or worse, lead to industrial action such as a strike.
experience - employees need to have experience of doing the job in order to develop the skills and expertise to carry out their jobs effectively.
capacity - a business will not be able to perform to its best if it is
not fully staffed. Sometimes when a business tries to recruit more staff, labour shortages can prevent success. An example is the lack of teachers of certain subjects.
describe the impact of technology on a business
breakdowns can be catatrophic - examples include a contact centre losing Wi-Fi connection and so being unable to serve customers, or machines in a factory breaking down and production coming to a halt.
loss of relationships - can impact negatively on employee morale and rapport as staff email each other more rather than having face-to-face
conversations.
lack of technology - can leave the organisation behind its competitors, for example not selling online (e-commerce) means a business is missing out on a global market it can sell to 24/7.
financial cost - of installing and replacing technology (most modern technology has a very short life cycle).
staff need to be trained - in how to use new technology or new
versions of existing technology.
what is corporate culture
corporate culture is the set of values, beliefs and customs that is shared by all people in an organisation.
describe methods to promote corportate culture
company values - these need to be developed by the founder
as values are hard to ‘adopt’ years down the line. Examples include having a strong corporate social responsibility (CSR) policy. This can be
outlined to stakeholders through a mission statement.
office layout - an open-plan office layout can encourage a relaxed atmosphere in an organisation. It can also encourage better communication and idea sharing among staff. Some modern technology companies such as
Facebook and Google have very relaxed office environments that include free cafés, sofas and beanbags for staff to sit on, and even sleep pods for staff to have a nap at work!
corporate colours - corporate colours give organisations and their staff a strong corporate
identity. A good example of this is easyJet’s ‘orange’ culture. Uniforms, planes, hotels and even their offices are bedecked in their famous orange colour! Colours also help customers recognise the organisation easily. Also, while uniform can be seen as part of a culture so can a casual dress code as it can be seen to relax staff and make them more productive.
uniformity of layout - uniformity of premises such as offices, shops and restaurants makes it easier for staff to transfer between branches and encourages customers to feel at ease, no matter what branch they are in.
language and jargon - an organisation can invent its own quirky words and phrases that help give employees a sense of belonging and appeal to customers looking to buy from a business that is a bit different.
symbols, slogans and mottos -the use of brand logos help give organisations identity that both customers and staff easily recognise. Also, the use of slogans and mottos can help reinforce business objectives to staff. For example, Honda’s motto ‘The Power of Dreams’ sums up to designers and production staff that they are a forward-thinking business that designs and produces cutting-edge products for customers.
rituals - some UK organisations have ‘dress-down Fridays’ to help relax their staff and break down the barriers that uniforms or office attire can create. Some American businesses have Friday afternoon barbecues for employees to get together and chat informally. Some Japanese companies even meet together in the morning to exercise and chant company songs.
stories - stories of past important events in an organisation’s life can help new staff become familiar with the expectations and direction of the organisation.
reward culture - many employees respond well to financial incentives such as bonuses, commission and pay rises. Others like the recognition and status of ‘employee of the month’ awards and promotions.
flexible working arrangements - an organisation can utilise flexible working arrangements such as flexitime or working from home. This can create a culture of trust and empowerment.
state the advantages of strong corporate culture
- flexible working arrangements mean staff work when and where they are most productive.
- employees feel part of the organisation through the use of uniforms, jargon and so on.
- customers gain a sense of a quality product/service.
- rituals create a relaxed ethos and can improve employee relations.
- employee loyalty is increased as they are happy in their jobs and feel a sense of belonging to the business.
- high-quality new staff are attracted to the business as they like the idea of working in the culture.
- a relaxed working environment, empowerment and a flat hierarchy can motivate staff.
state the disadvantages for corporate culture
- culture is hard to introduce unless it starts from the founders.
- staff have to be made aware of changes to culture and if they aren’t they may resist change.
- modern office cultures can leave some employees physically and socially distant from others, demotivating them.
- some cultures can be seen as a ‘bribe’ to get staff on board.
- management can lose focus and control if a culture is too ‘loose’.
