Theme 3 Topic 10 - Corporate Influences and Culture Flashcards
Define Corporate Influences
Factors that influence the objectives and strategies of a business
The corporate culture of an organisation…
Can influence decision making
Define Shareholder Approach
The views of shareholders influence decision making whilst others are marginalised
Define Stakeholder Approach
The views and needs of a wider range of stakeholders (e.g. customers, suppliers) are considered when making decisions
What are the three corporate influences?
Corporate culture, Stakeholder perspective, Business ethics
What are the two approaches to stakeholder perspective?
Shareholder approach and stakeholder approach
What are corporations with a strong ethical stance likely to do?
Make different decisions from those with little regard for ethics
Define Corporate Timescale
The outcome of decisions can have both a short and long term impact on a company
Define Long Term Decisions
Those which affect the vision, mission and objectives of a company (e.g. in 5 to 10 years time)
Define Short Term Decision
More tactical/operational in nature and are designed to achieve goals (e.g. in 12 months time)
Who often demands a short-termism approach?
Shareholders
What are three things a business is more likely to do if they have a short-termism approach?
Maximise short term profits, Invest less in R&D and training, Pursue external growth rather than organic
What are three drawback of short-termism?
Long term profitability might be affected, Negative impact on staff morale, Lose competitive edge in overseas markets
What are three things a business is more likely to do if they have a long-termism approach?
Recruit high quality staff and invest in training them, Invest in R&D and innovation to gain competitive advantage, Look for opportunities that yield long term profits
Define Evidence Based Decision Making
Requires a systematic approach to researching and analysing all the available information before a conclusion is reached
