Unit 3 Flashcards
What is a mission statement ?
Brief written statement of the purpose of a company or organisation
What does a mission statement do ?
Overall goal
Clear direction
Guides decision
What are the advantages of a mission statement?
Focus Motivates Attracts people/resources Public relation Clarifies purpose
What are the disadvantages of mission statement?
Vague
PR exercise
Needs to be supported by management
States obvious
What is a stakeholder?
Someone who is affected by a business decision
Name examples of a stakeholder
Shareholders Community Employees Owners Managers Customers
What is culture?
Shared business values and day to day behaviour
Examples of culture
How guests are looked after
Recruitment process
Delegation
How long staff in the company
Signs of a strong culture
Staff understand culture
Little or no policies
Consistent
Culture embedded
Signs of a weak culture
Inconsistent
Little alignment with values
Extensive bureaucracy and procedures
Importance of culture
Decision making Organisation Motivation Management control Recruitment How customers are treated Actions towards external stakeholders
What is a power culture?
Control comes within
Autocratic
Swift decisions
Smaller organisation
What is a role culture?
Bureaucratic
Delegated authorities
Power from position
Highly defined structure
What is a task culture?
Lasses fire
Teams to solve problems
Power by ability
Matrix organisation
What is a person culture
Individual power
Own boss
Eg doctor
What is the decision making process?
Identify objective Collect info Analyse Decide what action Communicate Outcome Evaluate
What is a strategic decisions?
Bigger plans for future. The bigger picture
What is an operational decision?
Everyday low risk decisions
What is a tactical decision ?
How your strategic decision will be carried out and achieved
What are the internal restraints ?
Company policies
People’s behaviour
Availability finance
What are external restraints ?
Economy
Legalisation government
Competitors
Lack of technology
What is SWOT?
Strength
Weaknesses
Opportunity
Threats
What is the purpose SWOT?
Define goals
Capability
Overcome weaknesses
Threats turn into opportunity
What are the advantages of SWOT?
Easy to understand Identifies weaknesses Helps set aims Understand business Identify potential threats
What are the disadvantages of SWOT?
Doesn't provide solution Doesn't prioritise Doesn't account for changes in external factors Too much info given Can generate too many ideas
What are the 5 forces of porters 5 forces?
Competitive rivalry Threat of substitute Threat of new entry Buyer power Consumer power
What does porters 5 forces do ?
Overview of an industry
Competitive advantage
Who has the power or control
Profitability
What is organic growth
Increasing turnover of its business
Growth internally
Why businesses grow ?
Increased sales
Higher employment
Increased economies of scale
Achievement
How they grow?
New shops
Bigger range
Increase output
More staff increases productivity
What is external growth ?
Growing through acquiring other business such as takeovers and mergers
What is a de-merger?
Company splitting apart
What is management buyout?
Managers buy out directors
What is a friendly takeover
Company takeover where the company agrees and is happy
What is a hostile takeover
Taken over where company is unhappy . By owning majority of shares.
Not consented
Why change happens?
New technology Competition Change in consumer taste Change in the law Labour market Economic conditions
The effects of change
Shorter product life cycle
Skill mismatch
Lower brand loyalty
The response to change
Seek commitment Research and development Expenditure HRM expenditure Capital investment
What is the problem of change
Resistance
Financial problem
Lack of expertise
What factors can minimise risk?
Planning Communication Location Insurance Backup for power and data Security Emergency funds
The 4 areas of risks with change
Size
Speed
Culture
Managing resistance
What is the problem with the size of a business with risk
Bigger the business less flexible and less adaptable
What does spiced stand for
Strong Pound Imports Cheap Export Dear
What happens to imports is there is a fall in the exchange rate
Bad
Reduced profit margin
Increase prices to cover costs
What happens to exports if the exchange price falls
Good
Cheaper
More units sold
More revenue =more profit
