Understanding business past papers Flashcards
Explain the advantages of internal (organic)
The business may hire new staff. This means they can bring new ideas to the business to develop new products
Less risky than being taken over by another business. this means control of the business will not be lost
the business may open more shops. this means the business can reach new markets and increase sales
the business may purchase new technology. this means the amount of production can increase
Describe the impact of competition policy on an organisation
May be forced to change prices
May be fined for anti-competitive behaviour
Compare functional grouping with customer grouping.
With functional groupings departments can compete against eachother. whereas with customer groupings they can also compete against eachother
Departments are grouped based on similar skills expertise and resources used. Whereas customer groupings is when the organisation groups their activities and resources based on the type of customer
Functional groupings cater to the whole organisation. whereas customer groupings will focus on customers needs
Customer groupings are more responsive to changing customers needs. whereas functional groupings are slow at responding to change
Explain the impact of environmental factors on an organisation.
There is a natural disaster such as a storm. this means the business could be forced to closed reducing profits
there can be strong weather such as heavy snowfall. this means suppliers may not deliver raw materials on time
There is a change of season. This means customer demands will change which can increase sales
There is increased pressure to recycle and become environmentally friendly. This means the businesses costs will increase
Explain the role of a manager in an organisation.
a manager organises resources. therefore it ensures the organisation is successful in achieving the objectives
a manager coordinates to make sure everyone is working towards the same goal. This means the task is done more efficiently
a manager commands by giving instructions. this means confusion amongst staff is reduced
manager delegates responsibility to carry out a task to a subordinate. This means the manager has more time to focus on
other work
a manager motivates staff and inspires them therefore the objectives may be achieved by staff working harder
Compare operational and strategic decisions
operational decisions are short term decisions. Whereas strategic decisions are long term decisions
operational decisions are made by branch managers. Whereas strategic decisions are made by senior managers
operational decisions usually involve low risk. whereas strategic decisions usually involve high risk
Explain the effects of outsourcing on an organisation.
outsourced staff usually have better expertise. This means the work is likely to be higher quality
outsourced companies will have specialist equipment. This means the organisation can sell their equipment
organisations can concentrate on core activities. Therefore it would result in the organisation producing a better core
product/service
more efficient and therefore more cost effective than doing the activity yourself. This means profits will increase
difficult to keep confidential information confidential. This means confidential information can be exposed to competitors
less control over the work that is completed. This means the work may not be completed the way the business would like it to be done
Discuss costs and benefits of Fairtrade.
Fairtrade mark can attract customers
it can be time consuming and costly to become Fairtrade certified
can give an organisation a positive ethical image
products tend to be more expensive for the consumer
