3.4 influences on business decisions

Question 1

Company culture: Power

Answer 1

From the core of the business and spreads throughout the organisation

Benefits:
- Quick decision making
-Clear authority

Drawbacks:
- Can cause increased rates of employee dissatisfaction
- Pressure on employee output = increased stress

Question 2

Company culture: Role

Answer 2

• Based around rules
• highly controlled
• Everyone knows their role + responsibilities in the organisation
• Tall structure

Benefits:
- Offers employee security
- Rewards
- Obtain skills
- Good employee performance

Drawbacks:
- Overly bureaucratic = slow decisions making

Question 3

Company culture: Task

Answer 3

Individuals are allocated tasks to complete together
- Success depends of team dynamics
- Power amongst employees often shifts

Benefits:
- Organisation is more flexible & can react top the external environment
- Improves creativity amongst staff
- Sharing of skills + knowledge

Drawbacks:
- Harder to achieve economies of scale
- Hard to control organisation on a day-to-day

Question 4

Company culture: Person

Answer 4

Where an individual believes they are the best solution and can offer something unique

Benefits:
- Organisation can employee less but obtain a high level of knowledge & skills = lower costs
- Quick Tod eat with sudden changes in the market

Drawbacks:
- Hard to among staff
- Hard to influence staff
- Staff have higher levels of control

Question 5

Evidence based decisions

Answer 5

• Data analysis on relevant info
• Costly
• time consuming
• Systematic approach
• Use quantative decision making techniques

Question 6

Subjective based decisions

Answer 6

• less structured
• Quick to acquire
• Based on past information/data
• Not always relevant to business
• Risky
• Best for smaller startups that don’t have historic data to base future predictions on

Question 7

Strong culture

Answer 7

• Low staff turnover
• Low levels of absenteeism
• Strong communication across business
• Good manager & employee relations
• Mistakes are seen as learning opportunities
• Customer remains main focus for the employee

Question 8

Weak Culture

Answer 8

• High rates of absenteeism
• Poor labour turnover
• Lack of productivity & motivation
• High staff turnover
• Employees feel pressured & blamed

Question 9

Short-termism

Answer 9

• A business/managers prioritise immediate issues
• Focused on quick financial award
• lack of focus on R&D
• High dividend payments

Drawbacks:
- Ignore opportunities that may arise in the future
- Lack investment into business resources
E.g Training, advertising, marketing etc

Question 10

long-termism

Answer 10

• A business sis focused on sustained growth
• Low levels of borrowing
• High levels of investment into R&D
• Incorporates aspects of corporate social responsibility & business ethics
• Increase market share
• High quality + sustained customer satisfaction