Module 1 Flashcards

Question

What are the reasons for Privatisation?

Answer 1

* Generate income for projects * Improve efficiency * Reduce government financial burden * Encourage competition ## Footnote Governments may privatise for economic reasons.

Answer 2

* Risk of private monopolies * One-off income from sales * Potential environmental degradation * Profit motive may lead to business closure ## Footnote These factors can impact consumer welfare.

Answer 3

The process of transferring ownership of an industry from the private sector to the government. ## Footnote The government purchases the majority of shares to manage the company.

Answer 4

* To save an essential enterprise that is in danger of closure. *Where consumers’ interests are in danger of being violated through the formation of monopolies, the government may nationalise the industry in an attempt to prevent this from happening. *The government may want to provide certain goods and services that would not otherwise be produced by the private sector or might be limited in their production.

Answer 5

*The products and services offered are usually lower in price than those of other firms *They increase employment opportunities *Essential services that may be very expensive may be undertaken by the government Disadvantages: *Where state-owned companies are monopolies, there is little choice for consumers *Large debts may cause a burden on taxpayers Some state-run enterprises suffer from gross inefficiencies *Politics may interfere with the running of these businesses.

Answer 6

These are controlled by the state but operate with a board of directors partially appointed by central government. Each board is answerable to a particular ministry in the government. Each entity is given specific responsibility for some aspect of the country. These are common in CARICOM in areas of housing, water, scientific research, agriculture and transport.

Answer 7

An acronym for: Specific – objectives should be quantifiable and precise: for example, ‘To increase retail sales by 15 per cent’. This objective is precise and states exactly what management wants to accomplish. Measurable – managers should be able to plot the organisation’s progress toward its objectives. This requires a well-defined reference point from which to start and a scale for measuring progress – for example, Attainable (or Achievable) – while the objectives should encourage people to work harder, achieving them must be within their reach. This is to say that the objectives should be not so extreme that they are impossible for the firm to attain Relevant (or Realistic) – many businesses have failed because they set unrealistic and irrelevant objectives, especially in their earlier years. Timely – earlier we stated that the business should track the achievement of its objectives over a period of time.

Answer 8

*Objectives act as a guide for employees and the employer to follow in order to propel the business forward and thus attain its goal *They give employees a sense of direction as to where the business is going *Objectives are also used as a tool to analyse the performance of the business and its employees over a period of time *They are important in the decision-making process, as they provide a guide and framework for management to make decisions. They are used to help management to explore different courses of action or strategies

Answer 9

This is a statement which outlines the main aim of a business or company. A mission statement gives a clear outline of the business’s aspirations and values. It enables all the stakeholders (employees, managers, customers and suppliers) to understand the underlying reasons for the actions that are taken by the business.

Answer 10

These will give an understanding of how the business plans to achieve its vision and mission. Vision and mission statements are broad and general, therefore, the corporate objectives help to narrow the focus. Corporate objectives can therefore be defined as specific, realistic and measurable aims which an organisation plans to achieve within a given period of time

Answer 11

The vision statement of a firm must be able to motivate workers by giving them drive to accomplish beyond what is happening at present. While the terms' ‘goal’ and ‘vision’ are sometimes used interchangeably, the vision outlines the firm’s goal which is said to be a desired future outcome that the organisation attempts to realise.

Answer 12

*Aims/Vision *Mission *Corporate objectives : give an understanding of how the business plans to achieve its vision and mission. *Strategic objectives: They refer to an organisation’s articulated aims or responses to address major change, improvement or competitiveness and outline how the firm plans to accomplish its corporate objectives. *Tactical objectives: Strategic objectives are sometimes called tactical objectives. They are performance targets established by middle management (department heads) for achieving specific organisational outcomes. They are plans designed to help execute the major strategic objectives and to accomplish a specific part of the organisation’s strategy. *Operational objectives: Operational objectives are short-term organisational objectives necessary to achieve longer-term tactical and strategic objectives. They are usually managed by lower level management such as supervisory personnel who are concerned with immediate results

Answer 13

Strength Weaknesses Opportunities Threats

Answer 14

Business ethics is the moral principles, policies, and values that govern the way companies and individuals engage in business activity.

Answer 15

Corporate social responsibility (CSR) is a management concept that describes how a company contributes to the well-being of communities and society through environmental and social measures Better Reputation – Companies that practice CSR gain trust and a positive image. Customer Loyalty – Consumers prefer businesses that care about society and the environment. Employee Satisfaction – Workers feel proud and motivated when their company does good. Investor Confidence – Shareholders and investors support ethical and responsible businesses.

Answer 16

Consumers: Give good quality, safe products at fair prices. Be honest in ads. Provide support after sale. Employees: Treat them fairly, involve them in decisions, keep workplaces safe, and communicate openly. Shareholders: Share profits, update them on performance, and protect their investments. Community: Reduce pollution, dispose of waste properly, and support local development.

Answer 17

Corporate governance is often defined as a set of rules, practices and processes which guide the way a business is operated. Principles include: (i) Board’s responsibility; and, (ii) accountability and transparency.

Answer 18

Levels of Decision-Making in Business Strategic Level (Top Management): Long-term, high-risk decisions (e.g., entering new markets). Tactical Level (Middle Management): Medium-term decisions (e.g., pricing, hiring). Operational Level (Lower Management): Short-term, low-risk decisions (e.g., ordering supplies).

Answer 19

Cost-effective – Worth the expense of gathering. Accurate – Reliable and correct. Relevant – Useful for the decision. Timely – Available when needed.

Answer 20

(i) definition of problem. (ii) data collection – importance and sources. (iii) analysis and evaluation. (iv) formulation of alternative strategies. (v) implementation; and, (vi) evaluation.

Answer 21

A qualitative decision is one that is made based on non-quantifiable information. These decisions often entail people’s value judgements and opinions. Firms embarking on qualitative decision making may make use of the ‘SWOT’ analysis (Strengths, Weaknesses, Opportunities and Threats) and ‘PEST’ analysis (Political, Economic, Social and Technological factors). In contrast, a quantitative decision is one based on statistical data. Unlike qualitative decisions, quantitative decisions rely on historical data that can be quantified and analysed to make generalisations and draw conclusions. Quantitative decisions could be based on information gathered from sources such as market research, historical sales figures and accounting information.

Answer 22

internal factors to include: * human factors; * financial factors; and, * technological factors. external factors to include: * governmental, political and legal; * social and cultural; * technological; * economic (to include cost-effectiveness); and, * environmental sustainability.

Answer 23

Globalization refers to the increasing interconnectedness of countries through trade, technology, culture, and politics, leading to a more integrated world economy. Drivers include: (i) technology. (ii) growth of multinationals.(iii) rise of economic trading blocs; and, (iv) integration of the global economy (improved relationships among government). (i) Consumer Behaviour More Choices – Wider variety of products/services. Higher Quality – Global competition improves standards. Stronger Rights & Responsibilities – Consumers demand ethical practices (e.g., fair trade, sustainability). (ii) Domestic Business Increased Competition – Local firms face pressure from foreign companies. Pricing Challenges – Must compete with cheaper imports. Quality Assurance – Higher standards needed to stay competitive. (iii) Trade Liberalization Reduced Tariffs & Barriers – Easier import/export, but local industries may struggle. Economic Growth – More trade opportunities for businesses.

Answer 24

A multinational corporation (MNC) is a large company that operates in multiple countries, with a headquarters in one country (home country) and business activities in others (host countries). Advantages for MNCs: Access to new markets & cheaper labor. Greater profits from global operations. Disadvantages for MNCs: Cultural & legal challenges in foreign markets. Risk of political instability or backlash.

Module 1 Flashcards

(48 cards)