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Higher Business > Understanding business > Flashcards

Understanding business Flashcards

1
Q

What are the 4 sectors of industry

A

Primary
Secondary
Tertiary
Quaternary

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2
Q

What is the primary sector of industry

A

Concerned with extraction of raw materials and natural resources from the land e.g farming, mining, fishing

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3
Q

What is the secondary sector of industry

A

Concerned with construction and manufacturing. Takes the raw materials from primary sector and converts them into new products

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4
Q

What is the tertiary sector of industry

A

Concerned with providing a service for consumers, e.g hairdresser, banks, supermarket

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5
Q

What is the quaternary sector of industry

A

Consists of those providing information services, e.g computing ICT, consultancy and R & D (specifically in scientific fields

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6
Q

Features of the private sector

A

Controlled by board of directors
Owned by private individuals
Financed by owners saving, share issue, grant/ bank loan
Aims to make a profit
E.g sole trader, partnership, limited companies

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7
Q

Features of public sector

A

Controlled by MPs and elected officials
Owned by government
Financed by taxation
Aims to provide a high quality service
E.g BBC, NHS, Schools.

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8
Q

Features of third sector

A

A business which is set up to support a good cause.
Owned by founders
Controlled by board of trustees
Financed by fundraising, donations and subscriptions
E,g British heart foundation, the big issue, Melrose rugby club

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9
Q

What is a private limited company

A

Businesses with their own legal identity which exists in the private sector of the economy.
People are invited to buy shares

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10
Q

Advantages of LTD 5

A

Limited liability
Easier to control
Don’t have to disclose as much financial information to the public.
Not a subject to hostile takeovers as sales of shares is agreed
No minimum share capital

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11
Q

Disadvantages of LTD 3

A

Set up requires registering with companies house which can be time consuming and expensive
Capital might be limited as do not seek shares in the stock exchange
Large businesses can become difficult to manage

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12
Q

What is a public limited company

A

Businesses with their own legal identity which exist in the private sector
Owned by shareholders
Controlled by board of directors
Sells shares on the public stock exchange

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13
Q

Advantages of PLC 3

A

Limited liability
Possible to raise large volumes of capital by selling shares in the stock exchange- easier to grow.
Large companies can benefit from economies of scale- reduced production cost may be attractive to investors as they can resell shares on the stock exchange if required

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14
Q

Disadvantages of PLC 4

A

Set up requires registering with companies house- expensive and time consuming
Have to disclose full financial info which can be viewed by public and competitors
Can grow large and become difficult to manage
Are subject to hostile take-overs

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15
Q

Similarities of LTDs and PLCs

A

Shareholders have limited liability
Owned by shareholders
Must be registered with companies house and complete the memorandum of association and articles of association
Run by board of directors

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16
Q

Differences between LTDs and PLCs

A

LTD minimum 1 shareholder
PLC minimum 2 shareholders

LTD minimum 1 director
PLC minimum 2 directors

LTD no minimum shares capital
PLC minimum of £50000 shares capital

LTD invite people to buy shares
PLC sell shares on public stock exchange

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17
Q

What is an MNC

A

A business which has its headquarters in one country but has assembly/ operations/ production facilities in other countries. MNCs have subsidiaries in more than one country

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18
Q

Advantages of an MNC

A

Can increase market share, sales and brand exposure by entering new markets
Secure cheaper premises, labour and raw materials which reduces operating costs
Avoid tax, trade barriers and tariffs
Gain access to natural resources
May be government grants available for setting up production
Save money on the cost of transporting goods to marketplace/ customers
Cheaper legislation may be more relaxed in host country- meaning production can be much cheaper
Increasing sophistication of ICT means that it is much easier and less costly for organisations to operate as a multinational business due to ease of communication.

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19
Q

What is a franchise

A

A method of setting up a business which involves a franchiser, who owns brand, product or service and the franchisee, who buys the rights to sell the franchisers product.

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20
Q

Advantages for the franchisee

A

Less risky as adopting a proven business model and selling a well known product with an existing customer base
The franchiser may carry out national advertising which will benefit the franchisee
The franchisee may receive support, training, advice and administration from the franchiser.

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21
Q

Disadvantages for the franchisee

A

The franchisee has very little autonomy over decision making, little opportunity for creative thinking.
Initial high investment and a % of profits has to be paid to the franchiser- loyalty fee
Reputation and profitability may depend on performance of other branches and the marketing of the franchiser

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22
Q

Advantages for franchiser

A

Quick way to increase market share and expand geographically increasing beans exposure with limited investment
% of profit from the franchisee is paid as a royalty payment each year.
Franchisees are usually highly motivated due to their high investment meaning they will work hard to succeed

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23
Q

Disadvantages for franchiser

A

Reliant on the franchisee to maintain the image and reputation of the business/ brand
Profits are split so the franchiser does not get as much as they would had they operated the branch themselves
Lose some control, even with agreed procedures- the quality of goods/ services are dependant in the skills and ability of the franchisee

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24
Q

What are the 8 different business objectives

A

Maximise profit
Growth
Maximise sales
satisfice profits
Provide high quality services
Managerial objectives
Corporate social responsibility
Increase market share

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25
Q

What are the objectives of the private sector (with description)

A

Maximising profit- give shareholders good return on investment, allows capital investment to grow business
Growth- benefit from Economies Of Scale, increase market share, become no1
Social responsibility- enhance reputation- attract customers, high calibre employees and investors
Maximise sales- drive out competition and benefit from EOS
Managerial objectives- I.e adhering to a budget or looking to acquire bonus or promotions

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26
Q

What are the public sectors objective

A

Manage budget effectively- ensure tax payers are satisfied with public spending
Provide efficient high quality service- to satisfy public services users and minimise complaints
Ethically and environmentally friendly- to ensure transparency, honesty while also reducing waste and costs
Well trained staff and attract high calibre employees- in order to provide high quality service to the public

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27
Q

What are the third sectors objective
Charities and voluntary orgs.

A

Charities
Increase awareness of their cause in hope to increase donations
Increase donations and funds to tackle their cause
Attract volunteers
Make best use of funds

Voluntary orgs
Provide service, friendship and opportunity to participate
Spend funds appropriately and effectively
Attract members

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28
Q

What is a merger

A

Where 2 firms agree to join together

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29
Q

What is a takeover/ acquisition

A

One company will buy a controlling interest in another

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30
Q

What is backward vertical integration

A

When a company joins with another at an earlier stage of production

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31
Q

What is horizontal integration

A

When a company joins with another at the same stage of production

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32
Q

What is internal/ organic growth

A

Growing naturally
Increasing production capacity
Employing more staff
New products
Opening new outlets
Using e-commerce

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33
Q

What is conglomerate integration

A

When a company johns with another in an unrelated industry

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34
Q

What is forward vertical integration

A

When a company joins with another a stage later in the production process

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35
Q

What is lateral integration

A

When a company joins with another in an related industry e,g hairdresser and beautician

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36
Q

What are the advantages of organic growth

A

No loss of control- no outsiders involved
New staff= new ideas
New market accessed= increase sales/ profits and increased market share
Less risk involved compared to a takeover or merger

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37
Q

Disadvantages of organic growth

A

Slow method of growth
Limited size of market
Restricted by amount of finance available

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38
Q

Advantages of forwards vertical integration

A

Can control supply to customer
Cut out middle man- increase profits

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39
Q

Disadvantages if forwards vertical integration

A

Fewer economies of scale because production is at different stages
Inexperience- difficult to coordinate and manage
Negative impact on core activities

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40
Q

Advantages of backwards vertical integration

A

Quality of inputs is guaranteed
Cut out middle man- reduces cost of sales
Can control supply of materials to competitors

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41
Q

Disadvantages of backwards vertical integration

A

Fewer economies of scale because production is at different stages
Inexperience- difficult to coordinate activities
Negative impact on core activities

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42
Q

Advantages of horizontal integration

A

Economies of scale
Eliminates a competition- increase market share
Can dominate market- control prices

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43
Q

Disadvantages of horizontal integration

A

Can break competition and market authority (CMA) rules
Quality could suffer due to lack of competition
Higher prices for consumer

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44
Q

Advantages of conglomerate integration

A

Can spread the risk of failure as have a wide portfolio
Overcome seasonal fluctuations
Larger org- more financially secure- less chance of takeover
Can gain assets from other company

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45
Q

Disadvantages if conglomerate integration

A

Lack of knowledge of industry
Difficult to manage due to size (diseconomies of scale)
Loss of focus on core activities.

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46
Q

Advantages of lateral integration

A

Spreads the risk as not relying on one product or service, targets a new market, increasing sales
Experienced in a similar industry- easier to manage

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47
Q

Disadvantages of lateral integration

A

Large financial investment to merge with another company
New focus can affect core activities

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48
Q

What is outsourcing

A

When a company hires another business to do some work for them e.g IT services, cleaning, accountancy

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49
Q

Advantages of outsourcing

A

Finance saved as no need to purchase specialist equipment
Reduced staffing and training costs
Only need to pay for service when required
Improves quality of service due to specialist
Specialist company benefits from economies of scale which means they can provide the service cheaper
Allows you to focus on core activities of the business

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50
Q

Disadvantages of outsourcing

A

Can be tied to a contract which can restrict the business (financial penalty to get out)
Lose control of quality
Loss of confidentiality may mean General Data Protection Regulation issues
Can be expensive as paying for a specialist service
Could be redundancies as current staff no longer required (payments/ bad pr)
Mistakes could arise due to a lack of communication

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51
Q

What do stakeholders include

A

Any internal or external person or groups that have an interest in the success of the business

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52
Q

What does a stakeholder not include

A

Competitors

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53
Q

What is the interdependence between an owner and employees

A

Owners need employees to produce goods whereas the employee needs the owner to provide job security and a salary

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54
Q

What is the interdependence between employees and customers

A

Employees need customers to buy goods to help pay wages whereas customers need employees to provide good customer service.

55
Q

What is the interdependence between owners and customers

A

Owners need customers to buy products, increasing revenue whereas customers need owners to provide them with the goods and services they want

56
Q

What is the conflict between owners and employees

A

Owners want to pay minimum wage to increase profits whereas employees want high wages to improve standard of living, which reduces profit

57
Q

What is the conflict between employees and customers

A

Employees want customers to spend more money on goods and services to increase commission whereas customers want employees to provide discounts and good value for money.

58
Q

What is the conflict between owners and customers

A

Owners want to charge customers high prices to maximise profits whereas customers want owners to charge low prices to gain value for money, which reduces profits

59
Q

What is the interdependence between owners and suppliers

A

Owners need suppliers to provide quality raw materials on time whereas suppliers need owners to provide repeat orders and payments for goods

60
Q

What is the interdependence between owners and the local community

A

Owners need the local community to support the business and provide employees whereas the local community needs owners to provide them with jobs and contribute to the local area.

61
Q

What is the interdependence between owners and the government

A

Owners need the government to maintain/ decrease tax rates to increase profits whereas the government need owners to decrease unemployment/ increase tax payments

62
Q

What is the conflict between owners and suppliers

A

Owners want suppliers to provide low prices and discounts to reduce production costs whereas suppliers want to charge high prices or give small discounts to increase their profits

63
Q

What is the conflict between owners and the local community

A

Owners want to keep costs low for high profits so may spend less on corporate social responsibility whereas the local community want owners to invest in CSR to help the local area.

64
Q

What is the conflict between owners and the government

A

Owners want to maximise profits so would like to dominate the market whereas the government does not want one owner to dominate the market as they control prices which means restrictions will be out in place.

65
Q

What are the external factors and what do they include

A

Political
Increase/decrease corporation tax
Increase/decrease VAT
increase minimum/ living wage

Economic
Recession/ boom
Increase/decrease interest rates

Social
Changing tastes and fashion
Aging population (demographics)

Technological
AI
Social media

Environmental
Weather
Ethical actions leg recycling

Competitive
Decreasing prices
New competition opening

66
Q

What is an economic policy

A

Actions taken by the government that impact borrowing and spending

67
Q

What is a FISCAL policy

A

changing tax levels to influence demand in the economy

68
Q

What is a competition policy

A

The CMA (competition market authority) implements rules to make the market place competitive

69
Q

What is a monetary policy

A

Decisions made by the government to control the quantity of money in the economy e.g interest rates.

70
Q

What is an advantage of increased interest rates

A

Greater return on savings which leads to more finance being available for growth

71
Q

What is a disadvantages of increased rates

A

Cost of borrowing increases which results in increasing expenses and reducing PFTY

72
Q

What is the result of increased taxation

A

Reduces profits after tax (corporation tax) which reduces shareholders dividends.

73
Q

What is the result of the internal factor of available finance

A

Lack of finance may mean cash flow problems which could lead to cost cutting measures e,g delayering

Lack of finance means there is no moment available to expand meaning objectives are not met

74
Q

What is the result of the internal factor existing technology

A

Technology owned by the organisation may break down which will halt production and lead to expensive repairs

75
Q

What is the result of the internal factor of HR
Ability of managers and employees

A

Ability of managers
Managers who make good decisions will have a positive impact on meeting objectives

If managers motivate employees this will improve quality and quantity of production

Ability of employees
Expert and capable staff will require less supervision, reducing management salaries.
Capable staff will also make less mistakes which will reduce wastage

Inexperienced staff will require additional training, increasing financial costs which reduces profits.

75
Q

What is the result of the internal factor availability of information

A

If there is too much information available it will take time to read and analyse which slows decision making down, making it harder to respond to market changes

Good quality info would ensure an informed decision is made, helping to meet objectives

76
Q

What is corporate culture

A

Corporate culture is a set of values or beliefs shared by all the people on the organisation.

77
Q

How do you build corporate culture

A

Company values
Setting mission statements
Company policies
Stores or jargon

Staff uniform
Staff training and development
Staff perks and rewards
Provide flexible working practises
Team building

Company colours
Logos and slogans
Shop/ office layout and decor.

78
Q

Advantages of corporate culture

A

Team building and uniforms promoted a sense of belonging which increases production quality and quantity.

Flexible working increases motivation leading to a better work life balance, which reduces absenteeism and reduces staff turnover

Training and development opportunities will attract high quality applicants to apply for vacancies.

Colours and logos make products instantly recognisable which boosts brand loyalty

79
Q

Disadvantages of corporate culture

A

Takes time and finance to implement leg buying uniforms and providing training

Can be difficult to change the culture once it has been developed

Flexible working practises can make employees feel isolates which reduces their sense of belonging.

80
Q

What are the 6 different types of structures

A

Tall
Flat
Entrepreneurial
Matrix
Centralised
Decentralised

81
Q

What is a chain of command

A

Route through which decisions are passed down and information is passed back up the hierarchy

82
Q

What is a span of control

A

The number of staff/ subordinates under a supervisor or manager

83
Q

What is delayering

A

Delayering is removing layers of management from a taller structure to create a flatter structure

84
Q

What are the advantages of delayering

A

Finance savings on salaries
Quicker decision making
More responsive to change and information is passed on quickly

85
Q

What are the disadvantages of delayering

A

Fewer promotional opportunities
Initial redundancy costs
May lose key skills/ members of staff

86
Q

What is downsizing

A

Downsizing is a reduction in the organisations size, labour force and operating costs in order to improve organisational efficiency, productivity and or the competitiveness of the organisation

87
Q

What are the advantages of downsizing

A

Reduce costs of wages, rents, overheads

A leaner business can focus on core activities and key strength= increased competitiveness

Incentive and opportunity for current staff to increase productivity/ show talent to keep their employment

88
Q

Disadvantages of downsizing

A

Redundancy costs initially, lose key skills, experience and knowledge form business

Possible bad publicity could impact on the reputation

Remaining staff feel vulnerable due to uncertainty= lower motivation and possible less productivity

89
Q

What is a tall structure

A

Has many levels of hierarchy, most responsibility and authority is at the top and the least is at the bottom.
There is a long chain of command and narrow span of control.

90
Q

Advantages of tall structure

A

More opportunities for promotion which can lead to greater staff motivation

Staff gain more support from their line manager

Their is a higher degree of supervision as each line manager has a limited number of people they are responsible for

91
Q

Disadvantages if tall structure

A

Span of control is narrow and the chain of command is long, making communication slower as instructions take longer to travel through the levels of the organisation

Longer lines of communication can make the firm less responsive to change

Can be expensive to run due to high wage costs

92
Q

what is a flat structure

A

Few levels of management, shirt chain of command so information passes quickly
Wide span of control

93
Q

What are the advantages of a flat structure

A

Lines of communication are short making the form responsive to change and decision making quicker
Staff working in a flat structure can be empowered to work independently and take on more responsibility

94
Q

What are the disadvantages of a flat structure

A

Wide span of control means that tasks must be delegated which can lead to employees feeling stressed and managers feeling overstretched

Less promotion opportunities within a flat structure, which may lead to the company losing staff to other organisations.

95
Q

What is the entrepreneurial structure

A

Used primarily by small organisations
There is usually one key decision maker- the owner

Staff may have some input but are rarely consulted

Final decision made by owner

96
Q

Advantages of entrepreneurial structure

A

Decisions are often made quickly as there is little consultation
Staff know who they need to report to
High quality decisions are made as decision makers are experienced

97
Q

Disadvantages of entrepreneurial structures

A

There is a workload issue for the decision makers as responsibility for many tasks will fall to them
If owner is busy or not available key decisions can’t be made
Staff may not get opportunity to show initiative, stifling creativity and possibly demotivating staff.

98
Q

What is the matrix structure

A

Used when cross-functional teams are created to run a project
Team members may come from different disciplines. The yea, will disband when the project is complete.

99
Q

Advantages of matrix structure

A

A good way of having different viewpoints and skills involved in a project

Provide staff with an opportunity to learn new skills from other members of the team which may lead to greater motivation and productivity

100
Q

Disadvantages of matrix

A

It is very expensive as managers needed for teams and departments

Team members may have priority issues when having to report to 2 bosses (line manager and project leader)
Duplication of resources such as administration and ICT

101
Q

What is a centralised structure

A

Where most decisions are taken by senior managers and then passed down the organisational hierarchy from head office

This structure relies on having strong and competent managers.

102
Q

Advantages if centralised structure

A

Centralised management structures can lead to greater uniformity and corporate identity within the organisation

Standardised procedures ensure consistency

103
Q

Disadvantages of centralised structure

A

Often less responsive to localised external pressures

Decisions may not reflect local needs

Lead to demotivated staff who are not being given the opportunity to be involved in the decision making process

104
Q

What is a decentralised structure

A

Authority is delegates down the chain of command to individual departments or branches

Each department within the organisation has the authority to make their own decisions

Can be seen in retail chains

105
Q

Advantages of decentralised structure

A

The business will be more responsive to changes in individual/ local markets as staff in each department have a greater local knowledge

Employees will be more motivated as they are given the opportunity to make decision and be creative

106
Q

Disadvantages of decentralised structure

A

Overall control of the organisation is delegated to departmental managers which can lead to poor decisions as the branch managers may not be as experienced as those in the head office

Individual branches may begin to compete and the overall corporate culture may be harder to develop.

107
Q

What is product/ service grouping

A

Divisions where each deals with a different product or product range. Each division has its own functional staff

108
Q

Advantages if product grouping

A

Each member of staff in that division will have the knowledge about the product, which. An encourage customer loyalty due to the high level of personal service

It is easier to see which parts of the organisation/ products are having a problem

Improves responsiveness to change as employees are more in touch with their individual/ specialist area

Differentiated approach can be adopted to suit each product

109
Q

Disadvantages if product grouping

A

There may be unnecessary duplication of resources tasks of staff across different products

Divisions/ departments may find themselves competing with one another

Communication between divisions can be poor and it may be difficult to shade expertise across departments/ products

A new group will be set up every time the business launches a new product this can be expensive due to needing to employ more staff and purchase more equipment etc.

110
Q

What is customer grouping

A

Divisions dealing with different types of customers. There may be a different division for retail, trade, overseas and mail order customers

111
Q

Advantages of customer grouping

A

Each division is able to give a service, price and promotion suited to its own type of customer

Customer loyalty builds up because of personal service

Allows management to identify poorly performing groupings

Improved responsiveness to the changing needs of the customer

112
Q

Disadvantages of customer grouping

A

If a new group of customers is created a whole new group of staff needs to be employed and trained.

Possible duplication of administration, equipment and staffing

Competition between departments may occur

Difficult to share expertise and resources across departments

113
Q

What is functional grouping

A

Departments where staff have similar skills, expertise and do similar jobs

114
Q

Advantages of functional grouping

A

Staff with similar expertise are kept together allowing specialisation and skills to develop

Organisation has a clear structure, lines of authority/responsibility, therefore staff know who to turn to when they need a job done or to seek advice

Staff are motivated as this structure maps out career paths and promotion opportunities

Less duplication of resources

115
Q

Disadvantages of functional grouping

A

Individual departments may become more concerned about their own interests rather than the organisations overall strategic objectives

The organisation may be less responsive to change in the market as communication and decision making is often slower as functional groupings often couples with centralised structures

Organisation may become too large to be managed effectively if functions grow rapidly

Rivalry between functions may cause tension or poor relationships

116
Q

What is place grouping

A

Divisions dealing with a different geographical area or religion

117
Q

Advantages of place grouping

A

Local offices with local knowledge can cater for local clients needs and consider language and cultural differences

Customer loyalty can be built up by providing a service that suits the local customers and their culture

Can be more responsive to changing external factors a in local markets

Failing departments can be easily identified

118
Q

Disadvantages of place grouping

A

Divisions may begin to compete with each other, forgetting the overall organisations objectives

Expensive to produce products in different geographical locations because of different languages and cultures

Communication can be difficult between branches due to time zones and language differences

Duplication of equipment administration and staff= high costs

119
Q

What is technology grouping

A

Grouping used by large manufacturing businesses which produce diverse products that require different technological processes.

120
Q

Advantages of technology grouping

A

Specialists are all working together which may result in a higher quality product

Wastage and costs may be reduced due to specialist equipment and staff knowledge

Easier for management to identify problems in the production processes

121
Q

Disadvantages of technology grouping

A

Duplication of equipment, administration and staffing

Technology groupings focus on their objective at the cleanse of organisational objectives

High cost of specialised training

122
Q

Strategic decisions
What
Why
Who
Examples

A

Long term decisions (5-10 years) usually high risk

Evaluate the long term goals and set overall direction of business (while considering external environment/ resources)

Senior managers

Increase market share
Become no.1 in the market
Become a MNC

123
Q

Tactical decisions
What
Why
Who
Examples

A

Medium term decisions, medium risk

Take to help achieve the strategic aims and objectives

Middle managers

Developing a new marketing campaign
Looking for a cheaper supplier
Launching a new product

124
Q

Operational decisions
What
Why
Who
Examples

A

Short term and day to day decisions, usually low risk

Made as a result of changing circumstances to ensure the smooth running of the business (reactive)

Supervisors, all employees

How much overtime to allow
How to deal with a staff absence

125
Q

What are the 6 factors that affect decision making

A

Availability of finance- enough to exploit new opportunities or make the best cost effective decisions

How much skills, expertise and training do managers have to make door decisions? What is the managers attitude to risk?

Is there enough time available to analyse alternatives and all info? Pressure for quick decisions could lead to a bad one

PESTEC external pressures e.g economic stability could affect decision making

Availability of technology- can help to make informed decisions and analyse data or compare alternatives

Quality and quantity of info, inadequate info can lead to wrong decision but too much can delay decisions being made.

126
Q

6 ways to assess if the decision was effective

A

Financial performance- before and after. Had profitability increased or costs decreased?

Market research. Questionnaire before and after of customers to assess impact of decision

Staff monitoring/ feedback- levels of staff turnover/ absences, feedback in appraisals and meetings

Sales monitoring- measuring sales levels to see if they have increased

Share prices- track the ride and fall do share prices following a major decision

Customer satisfaction- measure customer loyalty no volume of complaints- reviews, social media

127
Q

What is S in swot
Include examples

A

Strengths

Well known brands or products

Goods/ services that make the most profits

Products that are benchmarks in the market that competitors try to copy

Assets the business owns e,g modern factory, modern technology, retail outlet in a prime location.

Availability of finance

High quality staff with high morale and motivation

128
Q

What is W in swot
Include examples

A

Weaknesses

Lack of finance

Lack of up to date technology

Poor customer service reputation

Faulty products

Products or branches that are making losses

Assets in a state of disrepair e.g crumbling factory or aging fleet

Untrained staff or low staff morale

129
Q

What does O stand for in swot
Give examples

A

Opportunities

Competition going bust so you could take their customers

A boom period in the economy that the business could exploit

Customers tastes and fashions falling in line with an organisations specialism

Governments introducing favourable legislation

Advancements in technology that the business could exploit e,g e-commerce

130
Q

What does T stand for in swot
Gives examples

A

Threats

Competitors actions such as cheaper prices or better quality products

A downturn in the economy e.g a recession

Customers tastes and fashions changing away from this the business specialises in

Governments introducing legislation that impacts badly on the organisations

Advancements in technology that could leave the business behind its rivals

131
Q

Disadvantages of SWOT

A

Can be time consuming leading to slow decisions

The structured process can stifle creativity and gut decisions of managers

Can generate many ideas but does not help pick the best one

Produces results based on the opinions of those who carry it out, could lead to bias

Considers info at that point in time so quickly becomes outdated

131
Q

Advantages of SWOT decision making

A

No hasty rash decisions are made as time is taken to analyse current business position

Identify strengths to build on

Identify weaknesses to address

Propose and assess alternative solutions

Identify opportunities allowing them to be exploited

Identify opportunities allowing them to be exploited

Identify threats allowing them to be turned into opportunities

More likely to be quality decisions with long term effectiveness

132
Q

What are the roles of managers
POCCCDM

A

Plan
Looking ahead to set aims and strategies, identify threats and opportunities

Organise
Makes arrangements for all the resources if the organisation to be in the right place at the right time. Set tasks do be carried out in order to achieve targets and objectives

Command
Tell subordinates what their duties re. Issues instructions to employees

Coordinate
Make sure everyone is working towards the same aims and that the activities of individual workers fit in with the work of other parts of the organisation
Bring together the resources of the business to achieve the overall aim and objectives set

Control
Measures evaluates and compares results against planes, and supervises and checks work done

Delegate
Makes subordinates responsible for tasks and gives renminbi the authority to carry them out
By delegating management level tasks this helps lessen the managers workload

Motivate
Encourages and inspires others to carry out their tasks effectively often by introducing team work, empowerment, worker participation in decision making and other non-financial methods

Higher Business (1 decks)

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