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Business Revision > Unit 7 > Flashcards

Unit 7 Flashcards

1
Q

What is a cooperate objectives

A

It is an objective that is set with the business as whole in in a time frame which will be aligned with SMART goals. to allow a business to achieve their mission.

  • Cooperate objectives can lead to cooperate stratigies too.
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2
Q

Internal factors that influence cooperate objectives and decisons

A

-Business ownership: Types of ownership will have a different impact on the business e.g. sole traders and private limited companies will not be affected by short-termism

  • Business culture: For decisons to be applied successfully will need to be aligned with the culture values in order to gain full support
  • Business performance: Business performance will likely reflect on finance which in turn can affect the quality of how a business can run e.g. the quality of their employees.
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3
Q

External factors that influence corporate objectives and decisions

A
  • Pressures for short-termism: Occurs when a business will have decison making which only has short term effects such as pleasing shareholder value. Which in turn can damage the long-term goals of an organisation due to the lacking fundamentals.

Examples of the causes of short-termism include:
- Pressures from investors for short-term outcomes
- Directors postions are dependent on shareholders
- the frequency of financial reporting e.g. red tape crisis

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4
Q

Strategy for a business

A
  • A strategy is for a medium-long term value for a business.
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5
Q

Functional decision making

A

Refers to a decision which has been made to aim for the four fundamentals of a business which are :

  • Finance
  • HR
  • Operations
  • Marketing
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6
Q

What is SWOT analysis

A

Is an analytical tool which identifies the internal strength and weaknesses and the external opportunities and threats.

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7
Q

What is the value of SWOT analysis

A
  • Managers can develop new stratiges which can build on the positives whilst alleviate the negatives
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8
Q

How can SWOT analysis be summed up

A
  • Helps firms to identify their core competencies, which can help build on their strengths.
  • Helps firms focus on their future given its past and present condition
  • It’s a source of strategic planning
  • Identifes the optimal ways to achieve gains for the business
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9
Q

What are liabilities

A
  • They are what the business owes. What the business gain during the course of business obligations
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10
Q

What is capital employed

A

The value of total equity plus non-current liabilities.

  • The total money invested into the business
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11
Q

What are Non-current liabilties

A

debts that will be repaid under 1 year.

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12
Q

What are assets employed

A

The value of non current assets plus current assets

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13
Q

What is profit quality

A

The level to which profit is likely to continue into the future.

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14
Q

How to work out capital employed

A

Net operating profit/captial employed X 100

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15
Q

What is liquidity

A

Measures the extent in which a business is able to pay their short-term debt.

Done by the current ratio analysis

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16
Q

What does the gearing ratio measure

A

The business leverage and shows the extent to which their operations are funded by loans rather than their equity

17
Q

What is the gearing ratio

A

non current liablties/total equity + non current liablties X 100

18
Q

How to calculate payable days

A

Payables/cost of sales X 365

19
Q

How to calculate recievable days

A

Receivables/revenue X 365

20
Q

What do receivable days mean

A

The number of days it takes to convert receivables into cash

21
Q

What is inventory turnover

A

The number of times per period a business sells and replace its entire stock with inventories.

22
Q

How to calculate inventory turnover

A

Cost of good sold/ average inventories

23
Q

What comparisons can be made via fincial performance

A
  • Compare against the previous year results to see how they can improve
  • Compare results with any other business in the same industry
24
Q

What is the historical nature of financial performance

A
  • Changes in the economy
  • Actions of competitors
  • Advancements on technology
25
Q

What is window dressing in assessing financial performance ?

A
  • Made to appear better than they actually are e.g.
  • One off events e.g. the sale of an asset
  • Using intangible assets to up the brand value such as branding.
  • Short-term borrowing to up their cash-flow positon
26
Q

What are core competencies ?

A
  • Is another way of looking at the key strengths of a business.
  • It gives a company one or more competitive advantage when it comes to creating and delivering value to the customer.
27
Q

What are the cons of core competencies

A
  • Problems may occur with outsourcing. In order for a business to focus on its core competencies it may need to lose control of other factors of the business.
  • Consumer needs change over time therefore the business will need to prepare for these changes
27
Q

What should a core competency be ?

A
  • Difficult for competitors to replace
  • Provide opportunities for a business to expand in new markets
  • Provide significant benefit to customers
27
Q

What to do after identifying a core competency

A
  • They need to be nurtured and protected due to the fact that they can detioriate overtime therefore a strategy should take place to defend this and maximise potential
28
Q

What industry may short-termism thrive in ?

A
  • Types of fast moving industries such as technological or social media.
29
Q

How can long-termism be achieved ?

A
  • Investment in research and development of new products and processes
  • Focusing on customer satisfaction and loyalty
  • Focus on employee engagement and loyalty
30
Q

What is the reason for the Kaplan and Norton Scorecard model

A
  • It attempts to achieve a balance between financial and other measures of performance to sustain long-term performance.
  • The model recommends that managers track a small number of key measures.
31
Q

What measures are included in the Kaplan scorecard ?

A
  • Financial :
    revenue
    cash flow
    asset value
  • Customer
    Satisifaction
    retention
    market share
    brand strength
  • Internal business process
    Orders
    Inventory
    Cycle time
    quality control
  • Learning/growth
    Skills
    Education
    Turnover
    Satiscation of employees
32
Q

Cons of the Kaplan scorecard

A
  • Complex, some areas are difficult to quantify
  • Achieving the right balance is difficult
33
Q

Pros of the Kaplan scorecard

A
  • Provides a broader view and may detect weaknesses early
  • Employees are able to see the importance within the organisation which can be a motivator
34
Q

What is Elkington Triple bottom line

A
  • Emphaises the three Ps:
    Profit
    People
    Planet
35
Q

What does the triple bottom line intend to do ?

A
  • The economic value of business relations to the benfit of surroudings such as people and planet.
  • Fair pratices in labour employment and the community in which it operates in
  • The use of sustainable pratices and the reduction of environmental impacts
36
Q

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A

Business Revision (9 decks)

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