A2 Part 1 - Analysing the Strategic Position of a Business - Overall Performance Flashcards Preview

AQA A level Business > A2 Part 1 - Analysing the Strategic Position of a Business - Overall Performance > Flashcards

Flashcards in A2 Part 1 - Analysing the Strategic Position of a Business - Overall Performance Deck (23)
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1
Q

What is employee retention?

A

The ability of a business to persuade its staff to stay with them

2
Q

What is labour turnover and how do you calculate it?

A

The % of the workforce that leaves a business in a given period.

3
Q

Why is high staff turnover a problem?

A
  • Higher training and recruitment costs
  • Increases pressure on remaining staff
  • Disruption to production and productivity
  • Hard to maintain quality of customer service and product quality
4
Q

How can you improve staff turnover?

A
  • Effective recruitment and training
  • Competitive pay and benefits
  • Job enrichment
  • Reward staff loyalty
5
Q

What is labour productivity and how do you calculate it?

A

Measures how much one worker can produce in a given time

6
Q

Why does labour productivity matter?

A
  • Labour costs are normally a very high % of total costs
  • Business efficiency and profitability is closley lonked to productive use of labour
  • Competitvness depends on keeping unit costs down
7
Q

How can you improve productivity?

A
  • Measure performance and set targets
  • Streamline production processes
  • Invest in better capital equipment
  • Invest in employee training
  • Improve the layout or organisation of the workplace
8
Q

What is labour absenteeism and how do you calculate it?

A

Measures how often staff are absent

9
Q

What is a core competence?

A

Something unique that a business has, or can do, strategically well.

Enables a business to compete effectivley by focusing on their strengths

10
Q

What are the 4 ways that a business can develop core competencies?

A
  • Can arise from the collective learning or expertise of a business
  • Can arise from the business’s ability to bring together skills and technologies
  • Can arise from the businesses ability to add value to their products meaning they’re more superior than competitors
  • Can arise from the business being different to competitors
11
Q

What are the 3 criteria that has to be met for a business to have a core competence?

A
  1. Must provide consumer benefits
  2. Needs to be hard for competitors to imitate
  3. It can be used across many different products and markets
12
Q

What is Kaplan and Norton’s Balanced Scorecard?

A

Strategy performance management tool to keep track of the way that staff, within their control, are carrying out their activities and to monitor the concequences arising from those actions.

13
Q

What are the 4 different perspectives that Kaplan and Nortans Balance Score card suggest that a business should use to identify KPI’s?

A
  • Financial perspective
  • Customer perspective
  • Learning and growth perspective
  • Internal processes
14
Q

What are the advantages of Kaplan and Norton’s Balance Scorecard?

A
  • It takes a broader view of business performance
  • It links performance to long term aims and visions
  • It involves everyone in the business
  • Its flexible - each business can decide their own KPIs
15
Q

What are the disadvanatges of Kaplan and Norton’s balanced score card?

A
  • Danger of too many KPIs which may lead to confusion and lack of clarity
  • Difficult to find balance between all 4 perspectives
  • Too often senior management will prioritise the financial perspective to achieve short term gains
  • Information and KPIs need to be up to date
16
Q

What is Elkington’s Triple Bottom Line?

A

Highlights that the business has many different objectives - not just profit

17
Q

What is corporate social responsibility?

A

A form of self-regulation by which companies exceed legal minimum requirements in an attempt to be good citizens

18
Q

What 3 areas does the Triple Bottom Line highlight as important?

A
  • People
  • Planet
  • Profit
19
Q

Why is the Triple Bottom Line needed?

A
  • Businesses are usually assumed to be profit maximisers
  • Profit is the traditional measure of business success
  • Profit is closely linked with business value
  • Profit is often the basis for financial incentives
20
Q

What are the advantages of the triple bottom line?

A
  • Encourages businesses to think beyond narrow measure of performance
  • Encourages CSR reporting
  • Supports measurement of environmental impact and extent of sustainability
21
Q

What are the disadvanatges of the triple bottom line?

A
  • Not a very useful measure of overall business performance
  • Hard to reliably and consistently measure people and planet
  • No legal requirement
22
Q

What is shortism?

A

Concentration on short term projects or objectives for immediate profit at the expense of long term security

23
Q

What is long termism?

A

The practice of making decisions with a view to long term objectives or concequences