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Higher business > understanding business > Flashcards

understanding business Flashcards

1
Q

How does a firm add value

A

It produces goods that customers want

it attaches a brand to the good which allows the firm to charge a high price

reduce the costs of the manufacture which increases profit

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2
Q

what is the equation for profit

A

profit = revenue (price) - cost

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3
Q

what are the sectors of industry

A

primary

secondary

tertiary

quartenary

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4
Q

what is primary

A

the extraction of materials from the ground eg fishing, farming, forestry

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5
Q

what is secondary

A

the manufacturing of the goods eg shipbuilding, glass making

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6
Q

what is tertiary

A

providing a service to the public eg hospitals, banks

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7
Q

what is quartenary

A

this is the knowledge based part of the sector which provides services such as information technology contribution, education, research and development, other knowledge based services

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8
Q

what are the sectors of the economy

A

private

public

third

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9
Q

what is the private sector of the economy

A

firms that fall under this category, are owned and controlled by individuals and firms. Their aim is to make a profit

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10
Q

what is the public sector of the economy

A

organisations owned by taxpayer, funded by public purse and controlled on behalf of government

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11
Q

what is the third sector of the economy

A

part of the economy that is undertaken to provide a good or service that helps others

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12
Q

what are the advantages of the public sector

A

often less competition so less stress on managers

maximising profit is not the main objective so firm can concentrate on others

funded by the gov/taxpayers money rather than relying solely on borrowing/generating revenue

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13
Q

what are the two main types of limited companies

A

private limited companies

public limited companies

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14
Q

what are private limited companies

A

a company which only sells shares to family and friends

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15
Q

what are public limited companies

A

a company who sells shares on the stock market so anyone has access to their funds

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16
Q

what do both types of businesses have in common

A

they both have limited liability

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17
Q

what are the type of private sector businesses

A

limited companies and unlimited companies

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18
Q

what are the types of unlimited companies

A

soletraders and partnerships

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19
Q

what is a soletrader

A

a business run and controlled by one single person. these are usually small businesses eg corner shops

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20
Q

what is a partnership

A

a business run and contained by 2 to 20 people.

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21
Q

what is a franchise

A

this is a business arrangement where one business pays another to trade under their name and sell their goods and services

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22
Q

what are the advantages of a franchiser

A

franchiser gets a percentage of franchisee profits

quick method of growth for the franchiser

low risk strategy for the franchiser as they share the risk with the franchisee who invest a lot of capital

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23
Q

what are the disadvantages of a franchiser

A

reputation of the franchise is dependent on performance of franchisee which removes a little control from franchiser

franchiser only receives % of profit

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24
Q

what are the advantages of a franchisee

A

they have access to a lot of advice and expertise about running of the business

business name already established by franchiser and so franchise has less of a risk of failing

franchiser can gave franchisee help with loans and funding for business

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25
Q

what are the disadvantages of a franchisee

A

have to pay a royalty fee which eats into their profits

there is a initial high set up fee

franchisee has to follow rules set by franchiser which stifles creativity eg layout of store

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26
Q

what is a multinational organisation

A

an organisation which has an operating plant in different countries eg nike, apple

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27
Q

what are the advantages of a soletrader

A

owner makes all decisions

owner has complete control

all profits kept by owner

owner can choose own working hours

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28
Q

what are the disadvantages of a soletrader

A

unlimited liability

can only use finance provided by themselves

stressful

unlikely to get a low interest rate loan

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29
Q

what are the advantages of a partnership

A

expertise can be shared

workload can be shared

more finance is available

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30
Q

what are the disadvantages of a partnership

A

unlimited liability

partners can disagree

a new partnership agreement has to be set up if one person dies, leaves or joins, which can be costly

profits have to be shared

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31
Q

what does limited liability mean

A

it means that you only lose the money you have invested in for the business

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32
Q

what does unlimited liability mean

A

that you are responsible for all debts made in the business

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33
Q

what are the different terms of sources of finance

A

short term
medium term
long term

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34
Q

what are the sources of the short term finance

A

sale of an asset - firm will sell building of piece of an asset that it is not using

grant - lump sum of money given to business by a government body agency. It is to be used for a specific purpose. Do not have to be repaid

bank overdraft - this is money a business can take out even when its account balance is at 0. Cost business more interest than a bank loan

trade credit - supplier will deliver goods to firm and allow customers to pay at a later date

factoring - business gives cust trade credit and the cust fails to repay business, this often means the business can’t pay off their own debts. Third business, debt collecting business will buy off cust from business at lower price

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35
Q

what are the long term sources of finance

A

mortgage - loan given to firms who wish to purchase premises, Repaid in instalments with interest

owners savings - funds saved by owner and has invested them in the business

share issue - firm releases more shares in firm to exiting shareholders

venture capitalist - private investors who provide finance where banks decide it is too risky

debenture - group of companies will give a PLC long term loan to be repaid with fixed interest for a period of time. Full amount is then repaid

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36
Q

what are the medium term sources of finance

A

hire purchase - firm will hire piece of equipment and pay for it in instalments. After last payment firm takes ownership of the good.

leasing - firm rents building of piece of equipment for agreed period of time

bank loan - fixed sum of money given to business from bank. Has to be paid back in instalments over period of time with fixed interest.

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37
Q

what are the advantages and disadvantages of a sale of an asset

A

you dont have to pay back any debt

disadvantages

once you have sold the asset then you can no longer use it

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38
Q

what are the advantages and disadvantages of a grant

A

doesnt have to be repaid

disadvantages

will often come with conditions attached to the grant that you are required to fulfil. if you dont then the bank will take away grant

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39
Q

what are the advantages and disadvantages of a bank overdraft

A

helps firm out with cash flow problems as you can take money out of their account when balance is at 0

disadv

bank can withdraw facility whenever they want. can work out more expensive than loan, due to high interest rates

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40
Q

what are the advantages and disadvantages of trade credit

A

helps with cash flow as business doesnt need to pay upfront for the goods

disadv

normally business loses out on discounts for immediate payment

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41
Q

what are the advantages and disadvantages of factoring

A

helps with a businesses cash flow as they recieve advance payment of an invoice

disadvantages

business doesnt recieve full amount of original invoice from factor

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42
Q

what are the advantages and disadvantages of hire purchase

A

business recieves item upfront to use whilst making instalments

disadv

business does not own item until last payment is made, normally works out more expensive due to interest payments

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43
Q

what are the advantages and disadvantages of leasing

A

leased equipment can be changed when it becomes obsolete or only used when required therefore not tying up finance with an outright purchase

disadv

business never own equipment, also it can work out more expensive than a outright purchase

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44
Q

what are the advantages and disadvantages of a bank loan

A

business recieves lump sum up front and can spread repayments over an extended period of time

disadv

interest is charged meaning you are paying back more than was borrowed. smaller businesses usually have a higher interest rate

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45
Q

what are the advantages and disadvantages of a mortgage

A

same as bank loan but you own the property

disadv

if you dont keep up with repayments then bank can take ownership of property which may mean business loses use of premises

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46
Q

what are the advantages and disadvantages of owner’s savings

A

allows business to keep control of finances, reduces need to borrow and incur interest payments

disadv

once invested in business owner risks losing it if business fails

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47
Q

what are the advantages and disadvantages of share issue

A

allows business to raise very large sums of finance that do not need to be paid back

disadv

process of releasing shares can be expensive and it dilutes value of existing shares

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48
Q

what are the advantages and disadvantages of venture capitalist

A

more likely to provide business with finance and expertise when banks deem a loan to be too risky

disadv

normally charge high interest rates for loan and want part ownership in return for finance

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49
Q

what are the advantages and disadvantages of debenture

A

allows business to raise very large sums of money with interest repayments spread over a long period of time

disadv

if business making loss, then interest repayments must be made and debenture holders have right to sell businesses assets in order for loan to be repaid

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50
Q

what are the advantages of an LTD

A

shareholders have limited liability….soletraders and partnerships

control of company is not lost to outsiders….PLC

more finance can be raised from shareholders and lenders….soletrader

significant experience n expertise from shareholders and directors…soletrader

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51
Q

what are the disadvantages of an LTD

A

legal process in setting up business

shares cannot be sold to public therefore restrict finance intake…PLC

firm has to abide by companies act

account must be lodged at companies house therefore anyone can view them

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52
Q

what are the sources of finance for a PLC

A

retained profits, share capital, bank loan, bank overdraft, issue debenture, trade credit, debt factoring

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53
Q

what are the objectives for a PLC

A

maximise profits, dominate market, strong corporate image, strong ethica; reputation, growth and expertise

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54
Q

what are the advantages of a PLC

A

limited liability..losing the money that was only invested in, in the business
huge amounts of finance can be raised due to having shares published on the stock market
dominate markets as they can drive economies of scale
easy to borrow money from lenders as you are a bigger company

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55
Q

what are the disadvantages of a PLC

A

set up cost can be high
must abide by companies act
no control over who buys shares therefore subject to a hostile takeover
must publish annual accounts, as well as publishing them at the companies house, making them more exposed.

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56
Q

what is a creditor

A

you owe someone money

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57
Q

who is a debtor

A

someone who owes you money

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58
Q

what are the advantages of a multinational

A

organisations may become bigger due to them having operation plants in different countries.

may help avoid legal restrictions in their own country which could allow them to sell their products/services abroad

could allow for tax advantages which will increase profitability

can get cheaper labour which can increase profitability

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59
Q

what are the disadvantages of a multinational

A

cultural differences need to be respected, so the company would have to be sensitive to different cultures.

language barriers make it more difficult to make deals as a customer from the middle east may not have english as their first language.

legislation may be different in other countries so company might have to alter product/service

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60
Q

what is a public sector organisation

A

organisations owned by tax payers, funded by the “public purse” and controlled on their behalf by central and local government

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61
Q

what does a local gov include

A

education and leisure

local work

planning and transport

environmental services

housing

finance

information technology

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62
Q

what are the sources of finance of a public sector org

A

taxation

government grants

charges for use of services

Tv licence

Merchandise

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63
Q

what are the types of tax

A

income tax

national insurance contributions

consumption tax

excise duties

stamp duty

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64
Q

what is income tax

A

percentage of your tax will go to the government. 20% of tax usually does. The more you are paid, the more tax you have to pay off

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65
Q

what is national insurance contributions

A

this is based on a similar principle as income tax

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66
Q

what is consumption tax

A

VAT

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67
Q

what is excise duties

A

this is tax on alcohol and tobacco. the higher the tax goes on alcohol and tobacco, the more money goes towards the NHS to treat smokers and drinkers

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68
Q

what is stamp duty

A

this is the tax on buying houses and shares

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69
Q

what are the objectives of a public sector org

A

provision of a service

maximise efficiency

meet local needs

stick to agreed budgets

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70
Q

what is a third sector organisation

A

organisations that seek to fulfill some sort of objective and dont seek to make a profit for owners/shareholders

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71
Q

what are the types of finance of a third sector org

A

donations, fundraising, gov grants, lottery grants, profits from shops

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72
Q

what are the objectives of a third sector org

A

provide a service, help a cause, produce a surplus, research, maximise efficiency, fund medical care

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73
Q

what are the different types of objectives

A

corporate social responsibility, provision of a service, sales maximisation, profit maximisation, maximise efficiency, growth, and mangerial objectivesd

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74
Q

why set up objectives for the firm

A

so that the performance can be measured and to check whether the firm is growing or not

so that staff have to follow one common goal so that they strive to make the quality of the good/service better

so that targets can be set for workers, so they can feel motivated to work

workers can feel motivated to work to achieve that goal set by the firm

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75
Q

why have more than one objective

A

so organisations can respond to different economic circumstances

as firms may have an interest in different firms

one objective might feed into another, allowing more objectives to be completed

firm will set to achieve a variety of goals, allowing them to deal with more

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76
Q

how can a firm measure if an objective has been met

A

carry out surveys to see if there is a change in customers

carry out market research to see if customers are happier

check the number of customer complaints to see if service has been improved

check to see if staff have met their goals during appraisals

observe staff to see if their performance has improved

observe staff to see if they are more motivated to work

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77
Q

what could prevent the achievement of an objective

A

external factors - PESTEC

internal factors

recession

exchange rate rising

unrest in region

non coorperation of staff

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78
Q

what is Corporate Social Responsibility

A

(CSR) refers to a business practice that involves participating in initiatives that benefit society. where a firm takes into account its everyday dealings

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79
Q

what are the benefits of CSR

A

the reputation of the org can grow

employees are better motivated

employees may stay longer reducing costs and disruptions of recruitment training

can boost sales

attract new/specific market segment

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80
Q

what are the costs of CSR

A

additional costs with CSR as you are trying to help people and the economy

it is difficult to measure how well you are doing when you have CSR as an objective as you cant exaclty measure happiness

firms may pay too much attention to “feel good issues” instead of the rate at which sales and profits are coming in at to the business

firms have to constantly monitor their activities once a stance is taken, to make sure it is being provided throughout the whole firm

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81
Q

why would an organisation pursue an objective of growth?

A

dominate the market therefore they can control price on their products in the market

so they can exploite economies of scale eg through bulk buying

so the business can have a presence in many markets

so that they can avoid a takeover

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82
Q

what are the two ways a business can grow

A

internally (organic growth)

externally

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83
Q

what is organic growth

A

this is when an organisation reinvests profits or raise finance to invest internally

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84
Q

how can you use organic growth in order to grow as a business

A

open more retail premises or build more factories, so you can widen and increase your production capabilities

employ more staff which again allows you to increase your production capacity or deal with more customers

increase your product portfolio in order to appeal to new markets and spread your risk

85
Q

how can external growth be undertaken

A

TAKEOVER - one company buys out control and ownership of another

MERGER - this is when two companies come together to make a new company and where they share ownership and control of whole entity ( DOES NOT HAVE TO BE EQUAL)

86
Q

what is intergration

A

when two companies come together either after a takeover or merger

87
Q

what are the three types of intergration

A

horizontal

vertical

conglomerate/diversification

88
Q

what is horizontal intergration

A

when two firms on the SAME STAGE of production join together

89
Q

what are the advantages of horizontal intergration

A

common knowledge of market in which they operate so there is a reduced risk of failure that would have existed from entering a new market

reduce number of competitors which gives potential market domination and control over rice and supply

its quick and easy for the business to expand and also easy to increase market share

achieve economies of scale through buying discounts which lower average costs

avoids duplication of resources and is better for the environment

similar skills of employees ie combination of expertise, can specialise in its core area which brings cost savings

90
Q

what are the disadvantages of using horizontal intergration

A

firm is NOT spreading risk and if so the market suffers the whole business is at risk

company becomes too large and bloated. it will then become very hard to manage, inefficient and operate properly

91
Q

what is vertical intergration

A

when a firm acquires another firm on a different stage of production

92
Q

what are the advantages of vertical intergration (backwards)

A

business can control supply of components and raw materials

a business can standardise paperwork and procedure eg centralised buying which minimises operational errors

extend scope of firms activities which spread risk

93
Q

what are the advantages of vertical intergration (forwards)

A

it allows a business to secure profits margin of customers

they can control image and distribution outlets of distribution

it eases planning as firm knows its guaranteed outlets to sell its products

94
Q

what are the disadvantages of vertical intergration

A

it may be difficult to achieve economies of scale as firm is moving into different area of business - no nulk buying opportunities

more of a risk as firm may lack skills to thrive in new area of business

95
Q

what is conglomerate growth

A

this is the combination of 2 or more corporations engaged in entirely different businesses that fall under one corporate group

96
Q

what are the advantages of conglomerate growth

A

firm has a chance to spread risk ie if one product fails then they have another one to fall back on

if one brand is successful then it is easy to build that reputation and launch another product

it can attract a wide variety of customer segments

staff may be attracted to working for company as division has many job opportunities

big companies attracts investors which makes it financially secure

97
Q

what are the disadvantages of conglomerate growth

A

firm may spread itself too thin and fails to secure market lead in any market

firm will be unable to bulk buy so they cant achieve economies of scale and therefore reduce average costs

if you can’t concentrate the business’s core activities that is making you grow hen you are going to fail

98
Q

how can a business benefit by becoming smaller?

A

the business can focus on what it is they are good at and seek to grow profits and market presence

99
Q

how can you become smaller

A

deintergration/demerger - business splits in two or more separate businesses who have differing core activities to concentrate on

divestment - business sells off smaller less profitable parts if business or assets in order to RAISE FINANCE to REINVEST in core activities of business

100
Q

what is the functional groupings

A

this is where staff have similar skills and experience. They do similar jobs

101
Q

what would an organisation have if it has functional grouping

A

it will have departments for finance, marketing, operations, and HR

102
Q

what are the advantages of functional groupings

A

staff with similar expertise kept together allowing specialisation

org has clear structure

staff will know who to turn to when need a job done

103
Q

what are the disadvantages of a functional grouping

A

org may become too large to be managed effectively

may be unresponsive to change

individuals may become too involved with their own interests rather than whole org

104
Q

what is a product/service grouping

A

divisions/departments which deal with a different product or product range

105
Q

what are the advantages of a product/service grouping

A

each division can be more responsive to changes in its field

expertise can develop within a division regarding its product/service

can give more incentive for staff to perform better

management can easily identify parts of business that are not doing well

106
Q

what are the disadvantages of a product/service grouping

A

may be necessary duplication of resources/tasks across different products

divisions may find themselves competing with one another

107
Q

what is a customer grouping

A

these are divisions that deal with different types of customer. may be different divisions for retail, trade, overseas, and mail order

108
Q

what are the advantages of a customer grouping

A

each division is able to give service, price and promotions suited to its own type of customers

customer loyalty builds up because of personnel service which means business could sell products at a higher price

109
Q

what are the disadvantages of customer grouping

A

grouping may be expensive because of greater staff costs

possible duplication of admin, finance and marketing operations

110
Q

what are place/territory groupings

A

staff are divided into division dealing with different geographical areas

111
Q

what are the advantages of place/territory groupings

A

allows the org to cater for needs of customers in different geographical locations

112
Q

what are the disadvantages of place/territory groupings

A

can be expensive for staff with administration, finance and marketing procedures duplicated in various divisions

113
Q

what is a technology grouping

A

this is when a manufacturing company groups its business’s activities according to technological or production processes. can only be used by large co

114
Q

what is a line/staff grouping

A

this is when an org is divided up into line departments involved in generating revenue and staff departments providing specialist support for whole org

115
Q

what is an organisation chart

A

these show the formal structure of an organisation in diagram form

116
Q

what do organisation charts show

A

relationship between staff

who has authority over whom

who is in charge of org

chain of command and lines of communication

117
Q

what is the chain of command

A

shows the WAY authority and instructions are passed down vertically through an org.

118
Q

what if a chain of command is long

A

then communication may be slow

119
Q

what is the span of control

A

this refers to subordinates working under a manager

120
Q

what does the span depend on

A

capability of manager

capability of subordinates

task being undertaken

procedures being undertaken

how many people are under a section

121
Q

what does a tall structure have

A

many managerial levels

122
Q

what does a wide structure have

A

few managerial levels

123
Q

narrow span organisation

A

manager to supervise staff carefully, may lead to staff being under more pressure

manager may not have a lot of staff to share ideas with

subordinates may not have a lot of time to complete task set by manager

danger of interference of manager

124
Q

wide span organisation

A

high degree of delegation required meaning that there has to be a high quality of staff

queues more likely fro managers time which lead s to delays in decision making

manager under pressure to deal with everyone which leads to snap judgements and poor quality decisions

subordinates forced to make decisions which can lead to the manager losing control of org

manager has less time for planning

125
Q

what factors can influence an organisation’s structure

A

size of org

tech used within org

market in which they are in

skill set of staff

range of different product/services supplied

126
Q

what are the types of organisation structures

A

hierarchical

flat

entrepenuerial

matrix

centralised

decentralised

127
Q

what is a hierarchical organisation structure

A

traditional structure
tall pyramid with many layers of management.

the decisions and instructions are passed down from senior staff with info passed back up

employees in specialised departments - know their levels of responsibilities

appropriate for public sector firms eg police, schools

communication is low

inflexible - takes longer to adjust to market conditions

resistance to change

128
Q

what is a flat organisation structure

A

low pyramid
few levels of management

info can be quick and easily passed between levels

few levels of management - short level of command - greater independence

workers have a lot of responsibilty to make decisions - motivating

usually for small to medium sized businesses

can be difficult to get time w/ manager - workers feel unsure of their decisions

fewer managers - workers may feel frustrated at lack of motivational offers - leave

129
Q

what is an entrepreneurial organisation structure

A

small businesses - decisions made by small amount of people

decisions made quickly

staff know who they are accountable to

decision maker does not need to consult staff

difficult to use in larger business as it creates a heavy load for decision makers

can stifle creativity

130
Q

what is a matrix organisation structure

A

used on ad hoc basis - day to day basis

used when required

teams are created to carry out a specific task

people from different apartments come together to form group who works on project

used when org is launching a new product

teams have increased experience, motivation and job satisfaction as staff use particular expertise in different situations

good for tackling complex problems

can create confusion as to who reports to you

131
Q

where does the control and decision making occur in a centralised structure

A

within the top management in the head office

132
Q

where is a centralised used

A

within a hierarchical structure

133
Q

what are the advantages of a centralised structure

A

procedures can be standardised

decisions can be made for whole organisation

easier to promote corporate image

134
Q

what are the disadvantages of a centralised structure

A

little room for staff creativity

decisions don’t necessarily need to be reflect local needs

135
Q

what three types of decisions does a centralised structure use

A

strategic
operational
tactical

136
Q

what is a strategic decision

A

concerned with overall performance of whole organisation. everything else feeds into this process

137
Q

what is a tactical decision

A

concerned with achieving strategic decision eg maximise profit (strategic) can help grow externally (tactical)

138
Q

what is an operational decision

A

day to day decision eg in a supermarket if all tills are busy then business should put another one in

139
Q

what decisions are made in a centralised structure

A

strategic, tactical and some operational decisions

140
Q

what decisions are made in a decentralised structure

A

operational and some tactical decisions

141
Q

what are the advantages of a decentralised structure

A

subordinates given responsibility - makes them motivated to work

decision making is quicker

easier for local department to make decisions that reflect local conditions

142
Q

what are different types of organisational relationships

A

line

staff

lateral

functional

informal

143
Q

what is a line relationship

A

direct line chain of command and responsibilty between manager and surbordinate

144
Q

what is a lateral relationship

A

2 people on the same level but share no relationship between them

145
Q

what is a functional relationship

A

no line, no relationship between two people but one has a speciality that helps the other eg if marketing manager has a computing problem then IT manager would help marketing manager

146
Q

what is a staff relationship

A

no direst line or relationship. one person has authority over a particular area eg bursar has authority over finance so people on other levels would have to seek permission from them to spend their money

147
Q

what is an informal relationship

A

relationship that is built up in staff room - helps organisation operate

148
Q

what are the two changes in organisational structures

A

delayering

downsizing

149
Q

what is delayering

A

reducing staff by cutting out levels of management to flatten structure. its a smaller hierarchy

150
Q

what are the advantages of delayering

A 
improves communication 
quicker and more effective decision making 
empowers staff 
cuts costs 
allows org to be more responsive
151
Q

what are the disadvantages of delayering

A

managers have a wider span of control - more responsiblity - more stress

staff have to be made redundant - lowers staff morale

fewer promotional opportunities which could led to staff quitting

152
Q

what is downsizing

A

removal of certain areas of business - closing factories

153
Q

what are the advantages of downsizing

A

cuts costs
empowers remaining staff
more competitive and efficient

154
Q

what are the disadvantages of downsizing

A

firm can lose valuable skills eg R+D department which creates products
staff morale may fall

155
Q

what is an empowerment structure

A

occurs to delayering and downsizing. staff responsible for own work

156
Q

what can empowerment lead to

A

employees more motivated and productive

increased pay and training for staff

enhanced promotion aspects

staff develop greater skills

org becomes more streamlined

157
Q

what are the benefits of empowerment

A

good decisions quickly made

staff more motivated

improved productivity

improved competitiveness

improved communication

158
Q

what are the costs of empowerment

A

not all staff want to take part in decision making

managers unwilling to give up some responsibility

costly to train staff to make decisions

159
Q

what is an internal business environment

A

things within business that impact upon how it operates which they can normally control

160
Q

what does internal business environment include

A

staffing

finance

technology

corporate culture

161
Q

what is the impact of staffing

A

firms staff may have low morale and motivation - high absent rate

firm may have poor leadership - business lacks direction

staff may lack right qualifications

staff may be reluctant to accept change in firm

162
Q

what are the solutions for staffing problems

A

firm can organise team building sessions

firm makes objectives clearer to senior management

staff sent on training courses

senior management explain benefits to firm changing

163
Q

what is the impact of finance

A

firm may have poor cash flow

firm may have large amount of debt so therefore aren’t able to get a loan

firm has too little shareholders who are unwilling to invest in new project

firm may have failed to bring in customer debts meaning that they haven’t been able to pay off their supplier

164
Q

what are the solutions of finance

A

cut back on spending and set budgets. leasing/hire purchase

firm arrange meeting with bank so they can arrange how to repay debts before resulting in situation becoming bigger

firm can release more shares

dedicate time to chase in bills

165
Q

what is the impact of technology

A

firm may have out of date equipment has lower rate of output

is firm’s tech compatable with new tech

firm unable to analyse data collected through websites as staff unaware how to sort databases

166
Q

what is sorporate culture

A

values, beliefs, norms relating to company that is shared by all staff

167
Q

what does corporate culture

A

logos
symbols
mottos
uniform and shop layout

168
Q

how can staff become aware of companies corporate culture

A 
training courses 
employee of month awards 
company events 
social events 
staff uniforms 
flexible hours 
balance of work and home 
procedures within business
169
Q

what are the advantages of corporate

A

increased staff motivation
improved employee relations
increased employee loyalty
increased productivity

170
Q

what is the role of a manager

A

planning - looks ahead - sets aims and objectives for firm

organising - ensures right resources in right place

commanding - tells subordinates what their duties are

controlling - measures, evaluates. compares results against plans

co ordinating - makes sure everyone working towards same aims and activities of worker fit in with work of other parts of organisation

delegates - makes subordinates responsible for tasks and gives them authority to carry them out

motivates - encourages staff to carry out task effectively often introducing team works empowerment and non financial methods

171
Q

what is the decision making process

A 
P - identify the problem
O - identify the objective 
G - gather the information 
A - analyse the problem
D - devise alternative solution
S - select an alternative solution 
C - communicate the decision
I - implement the decision 
E - evaluate the results
172
Q

identify the problem

A

what has caused sales to fall? ie recession

customers gone to comp?

173
Q

identify the objective

A

what goal is firm going to pursue? eg increase sales by 20%

174
Q

Gather the information

A

what would cost be? what new staff would have to be employed?

175
Q

Analyse the information

A

can firm afford this expenditure

176
Q

Devise an alternative solution

A

do nothing? buy over existing co?

177
Q

Select an alternative solution

A

introduce firm’s own website, hire new technical staff

178
Q

Communicate the decision

A

let main shareholders know

179
Q

Implement the decision

A

arrange launch of new website

180
Q

Evaluate the results `

A

compare your increase in sales to firms objectives

181
Q

what is SWOT analysis

A

strengths, weaknesses, opportunities, threats

182
Q

what is the internal SWOT

A

strengths and weaknesses

183
Q

what is the external SWOT

A

opportunities and threats

184
Q

what are the factors that would encourage a quality decision to be made

A

well trained staff

quality information

use of decision

time taken not rushed

many alternatives considered

decisions are evaluated

staff consulted and decision is therefore not imposed on them

185
Q

how can a manager check the quality of their decisions

A

quantative info - profit and sales figures

customer opinions - have they dropped

employee motivation - apprasials, surveys
staff absenteeism

186
Q

what are the advantages of a structured decision

A

time taken to gather and analyse decision therefore no rash decisions are made

time taken to identify alternative solutions thereby giving best chance of picking best one

all possible outcomes are looked at using best information available

people are given the time and opportunity to think up idea so they are more creative

decisions evaluated therefore you will see how effective they are

187
Q

what are the disadvantages of a structured decision

A

not all decisions need thorough analysis of decision in hand

can stifle creativity - managers intuition lost when making decision

time taken up making the decision and so firm may fail to exploit the current trend

188
Q

how does ICT aid decision making

A

plays an important role when making decisions in modern org. It includes different pieces of hardware and software.

189
Q

what does this hardware and software include

A

spreadsheets - finance/stats

databases - stores data eg staff details

wordprocessing - reports

presentation software - for meetings to clarrify any details about products

internet - could use it for looking up people who are interested in a vacant job ie facebook

email - communication between staff

videoconferencing - cuts costs

smartphones - staff can communicate

laptops/desktops - design logo

cloud system - store important details of product

190
Q

what are the external factors

A 
political 
economical 
social
technological 
environmental
competitive
191
Q

what is the importance of PESTEC

A

easy for managers to make decisions if they only had to consider what goes on inside a business - can’t do that

business must assess external factors

can present a threat or opportunity

business can identify external changes by conducting a PESTEC analysis

192
Q

what are political factors

A

action taken by gov
how political developments, regionally, nationally and internationally might affect a business

  • taxation rates
  • eu and uk laws
  • political decisions
  • age discrimination
193
Q

what are economic factors

A

inflation
exchange rate
recession
interest rate

194
Q

what are social factors

A 
ageing pop
first time mother - 29 
falling birth rate 
people becoming more health concious 
more environmentally aware 
more tech savvy
195
Q

what are technological factors

A

organisations have to keep up to date with current tech

smartphones and apps 
cloud storage 
self service checkouts 
barcode scanners for phones 
GPS
196
Q

what are the environmental factors

A

mother nature can be unpredictable so businesses have to have alternative arrangements in place

snow
flooding
pollution
hurricanes

197
Q

what are the environmental influences

A

climate changes

many restaurants and cafes would be affected by poor weather conditions - drop in sales

198
Q

what are the competitive factors

A

competition can be domestic or foreign
businesses want to stay ahead of comp
aim for cheaper produced products which sell more
aim for better rep than competiton

199
Q

what is the important thing about a PESTEC analysis `

A

how a business responds to it

200
Q

what is a stakeholder

A

a person, group or organisation who has an interest in the success of a business

201
Q

what are the internal stakeholders

A

owner
manager
shareholder
employee

202
Q

what are the external stakeholders

A 
government 
local community 
customer
donor 
supplier 
bank
203
Q

what are the two things each stakeholder has in a business

A

an interest - want

an influence - decision

204
Q

what is conflict between stakeholders

A

2 stakeholders competing for same resources

205
Q

what is interdependence between stakeholders

A

2 or more stakeholders having a common need

206
Q

what are the advantages of a private limited companies

A

owners have limited liability, ownership is not lost to outsiders, business usually retains a close and tight knot friendly feel with a high level of customer service, expertise n business acumen are gained from an experienced board of directors

207
Q

what are the disadvantages of private limited companies

A

profits have to be split with many shareholders by issuing dividends
a complicated legal process is required to set up the company
limited source of capital is available as shares not sold on stock market

208
Q

what are the advantages of public limited companies

A

shareholders have limited liability
large amounts of finance can be raised through the public sale of shares
it is easy to borrow finance dur to the PLC’s size and rep so is less risk for banks
plcs can easily dominate the market

Higher business (11 decks)

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