Flashcards in 3.4 influences on business decisions Deck (21)
what does corporate decision making involve?
- corporate culture
- stakeholder perspectives
what are short term perspectives likely to focus on?
- maximise short term profits
- invest less in R&D and training
- return profits to shareholders
- pursue external growth strategies
what are long term perspectives likely to do?
- invest in R&D and training
- focus on profit quality
- take an ethical stance on decision making
- pursue the interest of stakeholders
what is corporate culture?`
- includes the traditions, rituals, attitudes and values that make up the way a business is run
what are benefits of a strong culture?
- a sense of identity
- a sense of togetherness
- improved commitment from employees
- reinforces the values and beliefs
what 4 distinct organisational cultures does Charles Handy identify?
- power culture
- role culture
- task culture
- person culture
what is power culture?
- a few people drive the organisation and decisions
what is role culture?
- people associate with a team or function
what is task culture?
- employees associate with a task or project
what is person culture?
- employees have a great deal of independence
reasons for changing organisational culture?
- a new leader
- poor performance
- corporate objectives
- customer needs
what are the problems changing culture?
- long process
- large organisations may have more than one culture
- culture is deep set
who are stakeholders?
- groups or individuals who have an interest in a business
who are internal stakeholders?
who are external stakeholders?
- local communities
what is the shareholder concept?
- the belief that the prime function of a business is to satisfy its shareholders
what is the stakeholder concept?
- where businesses cater for the needs of all stakeholders, not just shareholders
what is ethics?
- the moral principles that guide the behaviours of individuals and behaviours
what should ethical decision making consider?
- pressure groups
what is corporate social responsibility (CSR)?
- the belief a business should act responsibly and protect the interests of all the stakeholders
- going beyond following rules and regulations