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
2
Q
what is the equation for profit
A
profit = revenue (price) - cost
3
Q
what are the sectors of industry
A
primary
secondary
tertiary
quartenary
4
Q
what is primary
A
the extraction of materials from the ground eg fishing, farming, forestry
5
Q
what is secondary
A
the manufacturing of the goods eg shipbuilding, glass making
6
Q
what is tertiary
A
providing a service to the public eg hospitals, banks
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
8
Q
what are the sectors of the economy
A
private
public
third
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
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
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
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
13
Q
what are the two main types of limited companies
A
private limited companies
public limited companies
14
Q
what are private limited companies
A
a company which only sells shares to family and friends
15
Q
what are public limited companies
A
a company who sells shares on the stock market so anyone has access to their funds
16
Q
what do both types of businesses have in common
A
they both have limited liability
17
Q
what are the type of private sector businesses
A
limited companies and unlimited companies
18
Q
what are the types of unlimited companies
A
soletraders and partnerships
19
Q
what is a soletrader
A
a business run and controlled by one single person. these are usually small businesses eg corner shops
20
Q
what is a partnership
A
a business run and contained by 2 to 20 people.
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
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
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
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
25
what are the disadvantages of a franchisee
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
26
what is a multinational organisation
an organisation which has an operating plant in different countries eg nike, apple
27
what are the advantages of a soletrader
owner makes all decisions
owner has complete control
all profits kept by owner
owner can choose own working hours
28
what are the disadvantages of a soletrader
unlimited liability
can only use finance provided by themselves
stressful
unlikely to get a low interest rate loan
29
what are the advantages of a partnership
expertise can be shared
workload can be shared
more finance is available
30
what are the disadvantages of a partnership
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
31
what does limited liability mean
it means that you only lose the money you have invested in for the business
32
what does unlimited liability mean
that you are responsible for all debts made in the business
33
what are the different terms of sources of finance
short term
medium term
long term
34
what are the sources of the short term finance
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
35
what are the long term sources of finance
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
36
what are the medium term sources of finance
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.
37
what are the advantages and disadvantages of a sale of an asset
you dont have to pay back any debt
disadvantages
once you have sold the asset then you can no longer use it
38
what are the advantages and disadvantages of a grant
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
39
what are the advantages and disadvantages of a bank overdraft
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
40
what are the advantages and disadvantages of trade credit
helps with cash flow as business doesnt need to pay upfront for the goods
disadv
normally business loses out on discounts for immediate payment
41
what are the advantages and disadvantages of factoring
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
42
what are the advantages and disadvantages of hire purchase
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
43
what are the advantages and disadvantages of leasing
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
44
what are the advantages and disadvantages of a bank loan
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
45
what are the advantages and disadvantages of a mortgage
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
46
what are the advantages and disadvantages of owner's savings
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
47
what are the advantages and disadvantages of share issue
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
48
what are the advantages and disadvantages of venture capitalist
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
49
what are the advantages and disadvantages of debenture
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
50
what are the advantages of an LTD
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
51
what are the disadvantages of an LTD
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
52
what are the sources of finance for a PLC
retained profits, share capital, bank loan, bank overdraft, issue debenture, trade credit, debt factoring
53
what are the objectives for a PLC
maximise profits, dominate market, strong corporate image, strong ethica; reputation, growth and expertise
54
what are the advantages of a PLC
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
55
what are the disadvantages of a PLC
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.
56
what is a creditor
you owe someone money
57
who is a debtor
someone who owes you money
58
what are the advantages of a multinational
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
59
what are the disadvantages of a multinational
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
60
what is a public sector organisation
organisations owned by tax payers, funded by the "public purse" and controlled on their behalf by central and local government
61
what does a local gov include
education and leisure
local work
planning and transport
environmental services
housing
finance
information technology
62
what are the sources of finance of a public sector org
taxation
government grants
charges for use of services
Tv licence
Merchandise
63
what are the types of tax
income tax
national insurance contributions
consumption tax
excise duties
stamp duty
64
what is income tax
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
65
what is national insurance contributions
this is based on a similar principle as income tax
66
what is consumption tax
VAT
67
what is excise duties
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
68
what is stamp duty
this is the tax on buying houses and shares
69
what are the objectives of a public sector org
provision of a service
maximise efficiency
meet local needs
stick to agreed budgets
70
what is a third sector organisation
organisations that seek to fulfill some sort of objective and dont seek to make a profit for owners/shareholders
71
what are the types of finance of a third sector org
donations, fundraising, gov grants, lottery grants, profits from shops
72
what are the objectives of a third sector org
provide a service, help a cause, produce a surplus, research, maximise efficiency, fund medical care
73
what are the different types of objectives
corporate social responsibility, provision of a service, sales maximisation, profit maximisation, maximise efficiency, growth, and mangerial objectivesd
74
why set up objectives for the firm
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
75
why have more than one objective
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
76
how can a firm measure if an objective has been met
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
77
what could prevent the achievement of an objective
external factors - PESTEC
internal factors
recession
exchange rate rising
unrest in region
non coorperation of staff
78
what is Corporate Social Responsibility
(CSR) refers to a business practice that involves participating in initiatives that benefit society. where a firm takes into account its everyday dealings
79
what are the benefits of CSR
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
80
what are the costs of CSR
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
81
why would an organisation pursue an objective of growth?
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
82
what are the two ways a business can grow
internally (organic growth)
externally
83
what is organic growth
this is when an organisation reinvests profits or raise finance to invest internally
84
how can you use organic growth in order to grow as a business
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
how can external growth be undertaken
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
what is intergration
when two companies come together either after a takeover or merger
87
what are the three types of intergration
horizontal
vertical
conglomerate/diversification
88
what is horizontal intergration
when two firms on the SAME STAGE of production join together
89
what are the advantages of horizontal intergration
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
what are the disadvantages of using horizontal intergration
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
what is vertical intergration
when a firm acquires another firm on a different stage of production
92
what are the advantages of vertical intergration (backwards)
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
what are the advantages of vertical intergration (forwards)
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
what are the disadvantages of vertical intergration
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
what is conglomerate growth
this is the combination of 2 or more corporations engaged in entirely different businesses that fall under one corporate group
96
what are the advantages of conglomerate growth
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
what are the disadvantages of conglomerate growth
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
how can a business benefit by becoming smaller?
the business can focus on what it is they are good at and seek to grow profits and market presence
99
how can you become smaller
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
what is the functional groupings
this is where staff have similar skills and experience. They do similar jobs
101
what would an organisation have if it has functional grouping
it will have departments for finance, marketing, operations, and HR
102
what are the advantages of functional groupings
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
what are the disadvantages of a functional grouping
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
what is a product/service grouping
divisions/departments which deal with a different product or product range
105
what are the advantages of a product/service grouping
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
what are the disadvantages of a product/service grouping
may be necessary duplication of resources/tasks across different products
divisions may find themselves competing with one another
107
what is a customer grouping
these are divisions that deal with different types of customer. may be different divisions for retail, trade, overseas, and mail order
108
what are the advantages of a customer grouping
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
what are the disadvantages of customer grouping
grouping may be expensive because of greater staff costs
possible duplication of admin, finance and marketing operations
110
what are place/territory groupings
staff are divided into division dealing with different geographical areas
111
what are the advantages of place/territory groupings
allows the org to cater for needs of customers in different geographical locations
112
what are the disadvantages of place/territory groupings
can be expensive for staff with administration, finance and marketing procedures duplicated in various divisions
113
what is a technology grouping
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
what is a line/staff grouping
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
what is an organisation chart
these show the formal structure of an organisation in diagram form
116
what do organisation charts show
relationship between staff
who has authority over whom
who is in charge of org
chain of command and lines of communication
117
what is the chain of command
shows the WAY authority and instructions are passed down vertically through an org.
118
what if a chain of command is long
then communication may be slow
119
what is the span of control
this refers to subordinates working under a manager
120
what does the span depend on
capability of manager
capability of subordinates
task being undertaken
procedures being undertaken
how many people are under a section
121
what does a tall structure have
many managerial levels
122
what does a wide structure have
few managerial levels
123
narrow span organisation
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
wide span organisation
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
what factors can influence an organisation's structure
size of org
tech used within org
market in which they are in
skill set of staff
range of different product/services supplied
126
what are the types of organisation structures
hierarchical
flat
entrepenuerial
matrix
centralised
decentralised
127
what is a hierarchical organisation structure
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
what is a flat organisation structure
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
what is an entrepreneurial organisation structure
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
what is a matrix organisation structure
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
where does the control and decision making occur in a centralised structure
within the top management in the head office
132
where is a centralised used
within a hierarchical structure
133
what are the advantages of a centralised structure
procedures can be standardised
decisions can be made for whole organisation
easier to promote corporate image
134
what are the disadvantages of a centralised structure
little room for staff creativity
decisions don't necessarily need to be reflect local needs
135
what three types of decisions does a centralised structure use
strategic
operational
tactical
136
what is a strategic decision
concerned with overall performance of whole organisation. everything else feeds into this process
137
what is a tactical decision
concerned with achieving strategic decision eg maximise profit (strategic) can help grow externally (tactical)
138
what is an operational decision
day to day decision eg in a supermarket if all tills are busy then business should put another one in
139
what decisions are made in a centralised structure
strategic, tactical and some operational decisions
140
what decisions are made in a decentralised structure
operational and some tactical decisions
141
what are the advantages of a decentralised structure
subordinates given responsibility - makes them motivated to work
decision making is quicker
easier for local department to make decisions that reflect local conditions
142
what are different types of organisational relationships
line
staff
lateral
functional
informal
143
what is a line relationship
direct line chain of command and responsibilty between manager and surbordinate
144
what is a lateral relationship
2 people on the same level but share no relationship between them
145
what is a functional relationship
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
what is a staff relationship
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
what is an informal relationship
relationship that is built up in staff room - helps organisation operate
148
what are the two changes in organisational structures
delayering
downsizing
149
what is delayering
reducing staff by cutting out levels of management to flatten structure. its a smaller hierarchy
150
what are the advantages of delayering
```
improves communication
quicker and more effective decision making
empowers staff
cuts costs
allows org to be more responsive
```
151
what are the disadvantages of delayering
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
what is downsizing
removal of certain areas of business - closing factories
153
what are the advantages of downsizing
cuts costs
empowers remaining staff
more competitive and efficient
154
what are the disadvantages of downsizing
firm can lose valuable skills eg R+D department which creates products
staff morale may fall
155
what is an empowerment structure
occurs to delayering and downsizing. staff responsible for own work
156
what can empowerment lead to
employees more motivated and productive
increased pay and training for staff
enhanced promotion aspects
staff develop greater skills
org becomes more streamlined
157
what are the benefits of empowerment
good decisions quickly made
staff more motivated
improved productivity
improved competitiveness
improved communication
158
what are the costs of empowerment
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
what is an internal business environment
things within business that impact upon how it operates which they can normally control
160
what does internal business environment include
staffing
finance
technology
corporate culture
161
what is the impact of staffing
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
what are the solutions for staffing problems
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
what is the impact of finance
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
what are the solutions of finance
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
what is the impact of technology
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
what is sorporate culture
values, beliefs, norms relating to company that is shared by all staff
167
what does corporate culture
logos
symbols
mottos
uniform and shop layout
168
how can staff become aware of companies corporate culture
```
training courses
employee of month awards
company events
social events
staff uniforms
flexible hours
balance of work and home
procedures within business
```
169
what are the advantages of corporate
increased staff motivation
improved employee relations
increased employee loyalty
increased productivity
170
what is the role of a manager
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
what is the decision making process
```
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
identify the problem
what has caused sales to fall? ie recession
| customers gone to comp?
173
identify the objective
what goal is firm going to pursue? eg increase sales by 20%
174
Gather the information
what would cost be? what new staff would have to be employed?
175
Analyse the information
can firm afford this expenditure
176
Devise an alternative solution
do nothing? buy over existing co?
177
Select an alternative solution
introduce firm's own website, hire new technical staff
178
Communicate the decision
let main shareholders know
179
Implement the decision
arrange launch of new website
180
Evaluate the results `
compare your increase in sales to firms objectives
181
what is SWOT analysis
strengths, weaknesses, opportunities, threats
182
what is the internal SWOT
strengths and weaknesses
183
what is the external SWOT
opportunities and threats
184
what are the factors that would encourage a quality decision to be made
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
how can a manager check the quality of their decisions
quantative info - profit and sales figures
customer opinions - have they dropped
employee motivation - apprasials, surveys
staff absenteeism
186
what are the advantages of a structured decision
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
what are the disadvantages of a structured decision
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
how does ICT aid decision making
plays an important role when making decisions in modern org. It includes different pieces of hardware and software.
189
what does this hardware and software include
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
what are the external factors
```
political
economical
social
technological
environmental
competitive
```
191
what is the importance of PESTEC
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
what are political factors
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
what are economic factors
inflation
exchange rate
recession
interest rate
194
what are social factors
```
ageing pop
first time mother - 29
falling birth rate
people becoming more health concious
more environmentally aware
more tech savvy
```
195
what are technological factors
organisations have to keep up to date with current tech
```
smartphones and apps
cloud storage
self service checkouts
barcode scanners for phones
GPS
```
196
what are the environmental factors
mother nature can be unpredictable so businesses have to have alternative arrangements in place
snow
flooding
pollution
hurricanes
197
what are the environmental influences
climate changes
| many restaurants and cafes would be affected by poor weather conditions - drop in sales
198
what are the competitive factors
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
what is the important thing about a PESTEC analysis `
how a business responds to it
200
what is a stakeholder
a person, group or organisation who has an interest in the success of a business
201
what are the internal stakeholders
owner
manager
shareholder
employee
202
what are the external stakeholders
```
government
local community
customer
donor
supplier
bank
```
203
what are the two things each stakeholder has in a business
an interest - want
| an influence - decision
204
what is conflict between stakeholders
2 stakeholders competing for same resources
205
what is interdependence between stakeholders
2 or more stakeholders having a common need
206
what are the advantages of a private limited companies
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
what are the disadvantages of private limited companies
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
what are the advantages of public limited companies
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
