3.4

Question 1

Examples of corporate influences

Answer 1

• Objectives
• Ethics
• Culture
• Financial performance
• SWOT analysis
• Resources available
• Relative power of stakeholders.

Question 2

Corporate influences

Answer 2

Factors that affect strategic decision making

Question 3

Short-terminism

Answer 3

Pressure on a business to perform in the short-term which can harm long-term growth.

Question 4

Long-terminism

Answer 4

Decision making is based on achieving the long term objectives of a business.

Question 5

Characteristics of Short-terminism

Answer 5

• Maximise profits
• Lack of investment in R&D
• Lack of investment in training
• A hard HR strategy.

Question 6

Characteristics of Long-Terminism

Answer 6

• Heavy investment in R&D and innovation
• Soft HR strategy
• Build long-term relationship with suppliers and external stakeholders

Question 7

Evidence-based decision making

Answer 7

• Scientific decisions backed by research
• Outcomes can be simulated or tested
• Reduces but does not eliminate risk
• Decisions are objective

Question 8

Subjective decision making

Answer 8

• Based on intuition
• Quicker decisions can be made
• Experienced manager may understand the market
• Dominant leaders may push decisions forward
• May be necessary in dynamin markets to not miss opportunities

Question 9

Corporate Culture

Answer 9

The values and standards shared by people and groups within an organisation

Question 10

How corporate culture affects the way a business operates

Answer 10

• Decision making
• Organisational structure
• Communication
• Leadership styles
• Attitude towards work
• Workforce performance

Question 11

The importance of corporate culture

Answer 11

• Impacts staff motivation e.g. communication etc.
• Effects decision making e.g. speed / science v intuition etc.
• Competitiveness e.g. innovation / adaptability
• Brand image e.g. consumer perception / stakeholder opinion

Question 12

A strong culture

Answer 12

• Motivated and loyal workforce
• Greater efficiency
• Accept roles and responsibilities willingly
• Abide by policies
• Shared sense of responsibility towards objectives
• Staff respond positively to organisational values

Question 13

A weak culture

Answer 13

• Little alignment with organisational values
• Employees may have to be forced to perform duties
• Greater management control and supervision
• Treat the organisation as a source of income only

Question 14

Charles Handy culture classification

Answer 14

• Task
• Role
• Power
• Entrepreneurial

Question 15

Task culture

Answer 15

Achieving set outcomes through cooperation and team work.

Delegation

Question 16

Role culture

Answer 16

Clear rules and procedures
Clear hierarchal structure
Clearly defined structures with employees having clear roles

Question 17

Power culture

Answer 17

Centralised decision making
Autocratic leadership.
Only a few people have control

Question 18

Entrepreneurial culture

Answer 18

Risk taking and innovation is encouraged
Decentralised decision making
Democratic leadership
Failure is not criticised

Question 19

How corporate culture is formed

Answer 19

• Personalities and beliefs of the founders and leaders
• Behaviours of leaders
• Recruitment and training
• Day to day actions
• Reward schemes
• Accepted norms in the business

Question 20

Difficulties in changing corporate culture

Answer 20

• Resistance to change
• Lack of trust
• Period of adjustment
• Difficult to change habits that may be embedded
• Alienation of suppliers and customers

Question 21

Stakeholder

Answer 21

Any individual or group with an interest in the actions of the business

Question 22

Internal stakeholders:

Answer 22

• Employees
• Managers
• Owners

Question 23

External stakeholders:

Answer 23

• Customers
• Suppliers
• Shareholders
• Government
• Local community
• Society

Question 24

The stakeholder concept

Answer 24

Suggests a business is responsible towards all of its stakeholders and should consider them in decision making and objectives.
However, there is stakeholder conflict, not everyone can be happy. e.g. high wages for employees reduces dividends for shareholders

Question 25

Shareholder Concept

Answer 25

Suggests business responsibility is solely aimed at meeting the requirements of shareholders. e.g. profit maximising

Question 26

Business ethics

Answer 26

“doing what is right”

looks at the morality in decision making

Question 27

Ethics in strategic decision making:

Answer 27

• Location e.g. ability to exploit workers / impact on the environment
• Integration e.g. impact on workers / monopolies exploiting customers and suppliers
• Corruption
• Working with suppliers e.g. ethical sourcing

Question 28

How behaving ethically can be negative for a business

Answer 28

Trade offs e.g. making less profit

Question 29

Corporate Social Responsibility (CSR)

Answer 29

The continuing commitment by a business to behave ethically.
Accepting responsibility for stakeholders / the supplier
Following laws etc.

Question 30

Reasons for CSR / behaving ethically

Answer 30

• Financial benefits (attracting investment)
• HR benefits (motivation)
• Marketing benefits (good reputation)
• Operational benefits (positive relationship with suppliers)

Question 31

Reasons against CSR

Answer 31

Financial cost
Not meeting corporate objectives
Opportunity cost

Question 32

Carrols CSR

Answer 32

4 aspects of CSR

• Economic responsibility (wages)
• Legal responsibilities
• Ethical responsibilities (act in a way that is seen to be morally correct)
• Philanthropic responsibilities (to do good)

Question 33

Pressure to cause CSR

Answer 33

• Consumer actions
• Pressure groups
• Government actions
• Media coverage
• Investors