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Buisness > 3.4 Influences on business descisions > Flashcards

3.4 Influences on business descisions Flashcards

1
Q

what are corporative objectives?

A

specific targets set for the whole firm to reach in a given time period to achieve the corporate aims, they are SMART

corporate to functional to team to individual objectives

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2
Q

what are corporate aims?

A

a generalised statement of where a business is heading, it is a long term plan from which business objectives are derived.

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3
Q

What is short-termism

A

when actions of managers over-prioritise immediate issues, ignoring long-term ones

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4
Q

Name 4 main causes of short-termism

A

-relationship between plcs & financial markets; city investors have more shares in plcs than private investors

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5
Q

Name 5 effects of short-termism

A

-inadequate expenditure on research & development

-accounting adjustments that inflate current earnings

-willingness to cut workforce quickly -> high labour turnover

-focus on takeovers to grow rather than organic growth

-minimal training budgets

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6
Q

Name 3 effects of long-term thinking

A

-companies willing to show more patience will often find themselves in a better position competitively in the long term

-however, to do this requires the removal of many of the pressures that lead to short-termism

-a great example of long-term thinking can be found in Germany. Major plcs play a far smaller role in the German economy, which is dominated,

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7
Q

Name 3 effects of long-term thinking

A

-companies willing to show more patience will often find themselves in a better position competitively in the long term

-however, to do this requires the removal of many of the pressures that lead to short-termism

-a great example of long-term thinking can be found in Germany. Major plcs play a far smaller role in the German economy, which is dominated,

-

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8
Q

Name 3 effects of long-term thinking

A

-companies willing to show more patience will often find themselves in a better position competitively in the long term

-however, to do this requires the removal of many of the pressures that lead to short-termism

-a great example of long-term thinking can be found in Germany. Major plcs play a far smaller role in the German economy, which is dominated,

-

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9
Q

What is product differentiation

A

a businesses attempts to make its product stand out from those of rivals -> through marketing, design or quality

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10
Q

Explain Ansoff’s Matrix

A

Products
Existing New

   Existing     Market                            Product
                      Penetration                  development

Mrket

New Market Diversification
development

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11
Q

What is market penetration

A

the commonest and lowest risk strategy -> involves boosting market share through selling more of the same product to the same target market

-methods for this:
+finding new customers within the target market
+taking new customers
+increasing usage of the product among existing customers

risks

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12
Q

What is market development

A

-selling existing products in a new market

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13
Q

What is a major risk of market development

A

-company may not understand consumer behaviours in the new market

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14
Q

What is product development

A

-selling a new product to an existing market

-likely to have a good understanding of customer wants and needs

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15
Q

What is a risk of product development

A

-new product in an existing market -> must ensure the new product meets customers exact wants and needs

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16
Q

What is diversification

A

selling new products to new markets

-selling new products to customers whose tastes you have no experience -> tough

-can bring very high rewards

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17
Q

Why is diversification risky

A

-selling new products to customers whose tastes you have no experience -> tough

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18
Q

Name 2 risks and rewards of market penetration

A

risks
-potential declines in product life cycle
-lack of ambition from staff

rewards
-know the customers & competitors
-returns on extra investment will be predictable

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19
Q

Name 2 risks and rewards of market development

A

risks
-subtle cultural differences add hugely to risk
-practical differences matter

rewards
-huge potential economies of scale
-potential for glocalisation

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20
Q

Name 2 risks and rewards of product development

A

risks
-most new products fail -> risk level is high

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21
Q

Name 2 risks and rewards of diversification

A

rewards
-can transform size and opportunities for the business
-exciting for workforce -> motivates

22
Q

What is a SWOT analysis

A

-identifies businesses:

strengths, weaknesses, opportunities, threats,

23
Q

What is a top-down approach in terms of SWOT analysis

A

uses external management consultants working directly with the boss of the business

24
Q

Benefits and drawbacks of a top-down approach

A

+detachment from company culture may allow aspects of the business to be seen in new lights

-managers may fail to share all info with those conducting SWOT analysis to present business in a more favourable light

25
Q

What is a consultative approach in terms of SWOT analysis

A

when a boss travels around the business

-allows for more thorough analysis about what works well and what doesnt
-can do this by engaging with workforce, diff employees

26
Q

Benefits and drawbacks of a consultative approach

A

+greater insight from wider range of contributors
+chance for boss to gain first hand understanding

-staff may feel less willing to point out issues

27
Q

What are key performance indicators

A

quantifiable measures of aspects of a business’s performance that the business considers to be the main determinants of its commercial

28
Q

Name 6 examples of commonly used KPIs

A

-staff turnover
-brand recognition
-unit

29
Q

What is evidence-based decision making

A

-

30
Q

What is subjective decision making

A
31
Q

What is corporate culture

A

sums up the spirit, attitudes, behaviours and the ethos of an organisation

32
Q

What is a strong culture

A
33
Q

What is a weak culture

A
34
Q

Name 4 signs of a strong culture

A

-focusing on customers real needs -> allowing staff to make decisions

-staff show a real feeling for the organisation as ‘us’ as a long-term commitment

-a united view among staff that the organisation is force for good

-sticking together and working together at a time of crisis

35
Q

Name 4 signs of a weak culture

A

-staff follow a script when dealing with customers (untrusted)

-‘us’ tends to be a department, not the business

-cynical view among many staff -> doubting company’s supposed principles and ethos

-when things look bad -> better qualified staff look to find another job

36
Q

Name Handy’s 4 classifications of cultures

A

-power culture

-role culture

-task culture

-person culture

37
Q

What is a power culture

A

occurs when there is one/ a small group of extremely powerful ppl leading an organisation

38
Q

Name 3 characteristics within a power culture

A

-everything goes through boss
-communication is through personal contact
-autocratic leadership style

39
Q

What is role culture

A

is when power is based on position in hierarchy

-dominated by rules and procedures

40
Q

Name 4 characteristics of role culture

A

-power depends on position within organisational structure
-culture is bureaucratic
-organisation will struggle to cope with rapid change
-leadership style is likely to be autocratic

41
Q

What is a bureaucratic organisation

A

initiation stifled by paperwork and checking and re-checking of actions

42
Q

What is task culture

A

when the project is the central focus

-senior managers allocate projects to teams of employees

43
Q

Name 3 characteristics of task culture

A

-each project team is formed for a single project

-individuals power depends on their expertise rather than status within the organisation

-employees become used to working with staff from other departments -> understand diff perspectives

44
Q

What is person culture

A

-indivudals have become more important than organisation

-individuals form groups where they share knowledge and expertise

-operating outside restrictions of hierarchy

-empowered

-autonomous

-

45
Q

Name 3 characteristics of person culture

A

-staff are well paid
-leadership style is democratic
-staff feel sense of personal development

46
Q

Name 3 factors affecting corporate culture

A

-leadership style -> organisations formed by an entrepreneur with a strong character who is still in charge may reflect that leaders personality

-type of ownership -> plcs are likely to place the need to satisfy stock markets above all else -> can create a culture where short-term returns are encouraged, unlike privately owne family firms

-recruitment policies ->

47
Q

Name 4 reasons why people will resist attempts to changed culture

A

-self-interest

-low tolerance to change

-misunderstanding of the proposed change

-different assessments of theneed to change

48
Q

Name 4 factors needed for successful cultural change

A

-clear purpose

-education and training

-consistency of communication methods and messages

-effective communication that change is going to happen

49
Q

What are stakeholders

A

groups influenced by and influence operations of a business

50
Q

What are shareholders

A

owners of a limited company

Buisness (22 decks)

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