CH3: Adapting to challenges of the business environments

Question 1

Provide the defintion of Hedging.

Answer 1

Investing money in a way that it’s value overcomes inflation.

Question 2

Name 3 ways in which a business can adapt to the challenges of the business environments.

Answer 2

1. Information management
2. Strategic responses
3. Mergers, takeover, alliances and acquisitions

Question 3

Discuss Information management.

Answer 3

• Info must be stored and effectively used.
• Large capital invested
  -Increase in market share and profitability

Question 4

Discuss Strategic responses.

Answer 4

• How businesses respond to challenges by putting proper plans in place.
• Respond to competitors
• Effective response= eliminate and assist challenges.

Question 5

What is a Merger?

Answer 5

• 2 companies join together
• Share resources= more growth and sustainability

Question 6

What is a Takeover?

Answer 6

• Sometimes against will.
• Buy out shares of other business.

Question 7

What is an Acquisition?

Answer 7

• Buy business at an agreed price,
• Operate as a subsidiary

Question 8

What is an Alliance?

Answer 8

• Agreement between businesses with common visitors.
• Remain separate and merely co-operate.

Question 9

What is Organisational design?

Answer 9

How a business is structured and how it communicates it’s culture.

Question 10

What is the Direct influence on the environment and social responsibility?

Answer 10

• Implement sustainable CSI programmes to improve communities.
• Investigate alternative environmentally friendly production techniques.
• Joint ventures with other businesses and government.

Question 11

Give 4 ways in which a business can have a direct influence on environment.

Answer 11

• Be flexible by research.
• Influence suppliers with long-term contracts.
• Influence regulators through lobbying or bargaining.
• Influence customers base by creating new uses of a product.

Question 12

Give 4 projects undertaken by businesses as part of social responsibility.

Answer 12

• Support less fortunate people with donations.
• Protect environment and participate in community upliftment programmes.
• Allow employees to get involved in social development programmes.
• Engage in environmentally friendly campaigns.

Question 13

Give 4 benfits of social responsibility projects for businesses.

Answer 13

• Increase employee morale and job satisfaction.
• Attracts investors
• Promotes consumer loyalty= more sales.
• Enjoy support of community.

Question 14

What is Lobbying?

Answer 14

Organised process where individuals, businesses and organisations use their influence to change government policies.
- Influence situations or legislations.

Question 15

Give 4 reasons of why businesses Lobby.

Answer 15

• Advance a cause
• Find solutions to emerging generic challenges.
• Advance what business must deliver and builds public trust.
• Lobby child labour, clean air and water laws.

Question 16

Name the 3 types of Lobbying.

Answer 16

1. Hedging against inflation
2. Bargaining sessions between management and unions.
3. Influencing supervisory body/ regulations.

Question 17

What is Hedging against inflation?

Answer 17

• Invest surplus assets or money.
• Protect financial investments by spreading risk.
• Buy bonds,shares, property or precious metals to protect capital.

Question 18

What are bargaining sessions between management and unions?

Answer 18

• Purpose to find win-win sutiuation for both parties.
• Protect business from negative impact of strikes and loss in productivity.
• Be fair to establish trust and good communication.

Question 19

What is influencing supervisory body/ regulations?

Answer 19

• Influence changes to existing regulators.
• Protect sustainability
• Adhere to guidelines and restrictions.

Question 20

What is networking?

Answer 20

• Co-ordinated activity where people who have similar objectives meet and exchange info and ideas.
• Help business identify new business trends.

Question 21

Give 3 examples of Networking.

Answer 21

• Formal
• Informal
• Social media and internet

Question 22

Give 4 advantages of Networking.

Answer 22

• Attract new customers= more market share and profitability
• Role in marketing and expansion of business
• Assist in making future business decisions
• Source of new perspectives and business ideas.

Question 23

What are Power relationships?

Answer 23

• Measure of a business ability to control it’s environment and behaviour of other businesses
• Determines status in society.
• Form relationships with environment and markets.

Question 24

Name 3 ways a business can form Power relationships.

Answer 24

• Strategic alliance agreements
• Persuasion of large investors
• Company representatives influence.

Question 25

Explain Stretgic alliance agreements.

Answer 25

- Benefit from each others involvement. - Build on expertise ofeach partner and how they complement one another. - Benefit in infrastructure development and scarce skills.

Question 26

Explain Persuasion of large investors.

Answer 26

- Gain credit easily and negiotiate better deals from suppliers. - Positive influence on reputation and image. - Invite powerful influential people to sit on board of directors= valauble advice

Question 27

Explain Company representatives influence.

Answer 27

- Persuade investors to invest in particular business practices. - Invest time and energy to recruit right person. - Decision made on company's image, personality, comm. style and power of persuasion.