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Business Studies > Questions Commonly Wrong > Flashcards

Questions Commonly Wrong Flashcards

1
Q

What is capital expenditure?

A

Cash spent on investment (mainly NCA)

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2
Q

What is labour turnover?

A

Percentage of staff that leave a business per year

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3
Q

What does ‘Business Porocesses’ mean in Kaplan and Norton’s Balance Scorecard?

A

Looks at the business’ internal efficiency (speed of service and production line)

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4
Q

What does ‘Learning and Growth’ mean in Kaplan and Norton’s Balance Scorecard?

A

Looks at how the firm can evolve (provide more training or form partnerships with other businesses)

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5
Q

What does ‘Customer’ mean in Kaplan and Norton’s Balance Scorecard?

A

What customers think of the business (market share and new customer capture)

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6
Q

What does ‘Financial’ mean in Kaplan and Norton’s Balance Scorecard?

A

Looks at profit generation and shareholders’ concerns (dividends and return on capital employed)

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7
Q

State 3 benefits of Kaplan and Norton’s Balance Scorecard

A
  1. All round view of the business
  2. Doesn’t just focus on past figures
  3. Spreading the importance of measuring more than profit can lead to employee motivation.
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8
Q

State 2 drawbacks of Kaplan and Norton’s Balance Scorecard

A
  1. Measurements create targets in other areas besides the financial area which may increase the pressure that employees feel
  2. Can lead to problematic dilution of resources (if a business needs to focus more on financial aspect, then that’s where all energy and resources should go)
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9
Q

What is market capitalisation?

A

The total value of a trading business’ outstanding shares (shares that have been sold)

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10
Q

What is total contribution?

A

Total Sales - Total Variable Costs

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11
Q

What does capacity utilisation mean?

A

The percentage of a business’ potential output that is actually being done.

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12
Q

What are the 3 psychological states in the Hackman and Oldham model?

A
  1. Meaningfulness
  2. Responsibility
  3. Knowledge of the results
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13
Q

Name the 4 outcomes from the Hackman and Oldham model

A
  1. Motivation
  2. Job Satisfaction
  3. Absenteeism
  4. Performance and Quality
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14
Q

What kind of ratio is the current ratio?

A

Liquidity

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15
Q

State the 2 profitability ratios

A
  1. Return on Capital Employed
  2. Profit Margins (GP, OP,PFTTY)
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16
Q

What are the two things that make total equity?

A
  1. Share Capital (money gained from selling shares)
  2. Retained Profit
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17
Q

State 4 external stakeholders of the business

A
  1. Banks/Lenders
  2. Goverment
  3. Customers
  4. Pressure groups
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18
Q

State 4 internal stakeholders of a business

A
  1. Employees
  2. Shareholders
  3. Directors
  4. Investors
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19
Q

What are the 4 aspects of the stakeholder map?

A
  1. Keep updated/informed
  2. Manage closely
  3. Monitor (minimal effort)
  4. Keep satisfied
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20
Q

What is the acronym for Hackman and Oldham?

A

S-Skill Variety
T-Task Significace
T-Task Significance
A-Autonomy
F-Feed back

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21
Q

What is at the top of Maslow’s Hierarchy of Needs?

A

Self-Actualisation (Experience purpose)

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22
Q

What is at the bottom of Maslow’s Hierarchy of Needs?

A

Physiological Needs (food, water, shelter)

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23
Q

Rankings of all of Maslow’s Hierarchy of Needs

A
  1. Self-Actualisation
  2. Self-Esteem
  3. Love and Belonging
  4. Safety and Security
  5. Physiological Needs
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24
Q

Rank all of the aspects of Carroll’s CSR

A
  1. Philanthropic
  2. Ethical Responsibilities
  3. Legal Responsibilities
  4. Economic Responsibilities
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25
Q

What is the acronym for Porter’s 5 Forces?

A

B-Buyer Power
T-Threats of New Entry
T-Threats of Substitutes
S-Suplier Power
(Don’t forget Competition Rivalry)

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26
Q

What is float time in the critical path analysis?

A

The duration an activity can be extended/delayed so that the project still finishes within the minimum time.

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27
Q

Which one is the EST in the network analysis?

A

Bottom Forward (highest number wins)

The number at the bottom ahead of the letter. When picking a number bigg

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28
Q

Which one is the LF on the network analysis?

A

Top before the letter

The lowest number wins.

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29
Q

Which ones do you subtract in network analysis?

A

EST - (LF+ Duration) = Float Time

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30
Q

What are the 2 ways of working out profit?

A
  1. Total Revenue - Total Costs
  2. Total Contribution - Fixed Costs
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31
Q

Equation for Market Capitalisation

A

Number of shares issued x share price

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32
Q

Equation for Capacity

A

(Actual Output/Capacity Utilisation) x100

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33
Q

Margin of Safety Equation

A

Actual Output - Break Even Output

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34
Q

Break-Even Equation

A

Fixed costs / contribution per unit

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35
Q

Labour retention Equation

A

(number of staff retained/number of staff employed) x100

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36
Q

Labour turnover Equation

A

(number of staff leaving/number of staff employed) x100

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37
Q

Employees costs as a percentage of turnover Equation

A

(employee costs/turnover) x100

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38
Q

Return on Capital Employed Equation

A

(operating profit/capital employed ) x100

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39
Q

Payable Days Equation

A

(payables/cost of sales) x365

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40
Q

Receivable Days Equation

A

(receivable days/revenue)x100

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41
Q

Inventory Turnover Equation

A

cost of sales/inventory

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42
Q

Capital Employed

A

NCL + Total Equity

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43
Q

What is a planned strategy?

A

A strategy that is carried out over a period of time.

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44
Q

Name 2 benefits of a planned strategy

A
  • Easy to measure success against
  • Clear purpose for all employees
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45
Q

What is an emergent strategy?

A

Develops as the strategic plan is implemented

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46
Q

State 2 benefits of an emergent strategy

A
  1. Allows a business to adapt to its environment
  2. Encourages a business to learn from its mistakes
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47
Q

State 2 drawbacks of an emergent strategy

A
  1. Difficult to coordinate in a large business
  2. May lack clarity or an end goal
48
Q

When does strategic drift occur?

A

When a business’ strategy no longer matches the environment it operates in.

49
Q

What are the 4 phases of strategic drift in order?

A
  1. Incremental change
  2. Strategic drift
  3. Flux
  4. Transformational Change or Death
50
Q

What is Contingency Planning?

A

Planning for the unexpected such as natural disasters or loss of data or loss of key personnel (death/resignation)

51
Q

State 2 cons of contingency planning

A
  1. Waste of time and money if it never happens
  2. Opportunity Cost–could the money have been better spent elsewhere?
52
Q

State 2 pros of contingency planning

A
  1. Shows ethical concerns
  2. Covers fines/compensations if the business is found negligent or someone is dead
53
Q

State 2 features of a strong culture within a business

A
  1. Employees understand and respond to the culture so little need for policies
  2. Consistent policy
54
Q

State 2 factors of a weak culture within a business

A
  1. Little alignment with business values
  2. Inconsistent behaviour
55
Q

Whate are the four cultures in Handy’s Culture Model?

A
  1. Role
  2. Task
  3. Power
  4. Person
56
Q

State 2 features of the Role Culture in Handy’s Culture Model

A
  1. People clearly delegated authorities
  2. Decision making slow
57
Q

State 2 features of Task Culture in Handy’s Culture Model

A
  1. Teams are formed to solve particular problems
  2. No single power source
58
Q

State 2 features of Power Culture in Handy’s Culture Model

A
  1. Control radiates from centre
  2. Few rules and little bureucracy (hierarchy)
59
Q

State 2 features of Person Culture in Handy’s Culture Model

A
  1. Power lies in each group of individuals
  2. Common in firms of lawyers and accountants
60
Q

State 3 reasons why a business may want to change its culture

A
  1. High labour turnover and absenteeism
  2. Lack of innovation
  3. Loss of key and talented staff
61
Q

What are the 5 features of Hofstede’s National Cultures?

A
  1. Power Distance
  2. Uncertainty Avoidance
  3. Collectivism vs Individualism
  4. Femininity vs Masculinity
  5. Short-term vs Long-term
62
Q

What is an example of low and high Power Distance?

A
  1. Low - Egalitarian (people deserve equal rights)
  2. High - Hierarchial
63
Q

What is an example of low and high Uncertainty Avoidance?

A
  1. Low - Open to Change
  2. High - Prefer Routines
64
Q

What is an example of low and high Collectivism and Individualism?

A
  1. Low - ‘We ‘
  2. High - ‘I’
65
Q

What is an example of low and high Femininity vs Masculinity?

A
  1. Femininity - Nurture
  2. Masculinity - Power
66
Q

What is an example of short term vs long-term in Hofstede’s National Culture?

A
  1. Short-term - Traditional
  2. Long-term - Futuristic
67
Q

What does Lewin’s Force Field Analysis state?

A

Driving forces must be stronger than restraining forces for change to happen.

68
Q

What are the 4 reasons that Kotter and Schlesinger stated that there may be resistance to change?

A
  1. Paroschial Self-Interest
  2. Misunderstanding (or trust issues)
  3. Different assessment of the situation
  4. Low tolerance for change
69
Q

State the 6 ways that Kotter and Schlesinger stated that a business could overcome resistnace to change

A
  1. Education and Communication
  2. Participation and Involvement
  3. Facilitation and Support
  4. Manipulation and Co-option
  5. Negotiation and Bargaining
  6. Explicit and Implicit Coercion
70
Q

State the 2 types of synergy

A
  1. Cost Savings
  2. Revenues
71
Q

Name 2 features of a cost-savings synergy

A
  1. Better deals from suppliers due to larger sizes
  2. Higher productivity and efficiency due to shared assets and experience
72
Q

Define Extrapolation

A

Using historical trends to predict future trends.

73
Q

Drawbacks of Extrapolation

A

External Factors;
1. Rivals leaving/entering market
2. Economy could change; boom/recession
3. Need to take product life cycle into account

74
Q

Benefits of Market Segmentation

A
  1. Cater specifically to their target customers
  2. Pick more effective promotional strategies
    3.
75
Q

Define Fiscal Policy

A

Tax + Government Spending

76
Q

Define Monetary Policy

A

Interest Rates

Bank of England

77
Q

What is Protectionism?

A

Government policies set to restrict free movement of goods between countries.

78
Q

What is the aim of protectionism?

A

Protecting domestic businesses from overseas competition

79
Q

Name 3 trade barriers + define them

A
  1. Tariffs (taxes that increase the cost of foreign goods)
  2. Quotas (physical limits set on number of units imported)
  3. Subsidies (gov providing financial support to domestic businesses to help them compete with imports)
80
Q

Big Data Definition

A

Big data is the process of collecting and analysing large data sets from traditional and digital sources to identify trends and patterns that can be used in decision-making.

81
Q

Data Mining Definition

A

Data mining is the process of analysing data from different perspectives and summarising it into useful information, including discovery of previously unknown interesting patterns, unusual records or dependencies.

82
Q

Benefits of Data Mining

4

A
  1. Predicting buying trends
  2. Managing stock levels
  3. Reducing wastage
  4. Maximising customer satisfaction
83
Q

Main benefit of technology towards Marketing

A

Allows businesses to have the data they need to ensure that they can keep up with accurate dynamic pricing.

84
Q

An impact of technology on Marketing

A

Allows for personalised direct marketing which means businesses can cheaply send relevant, direct marketing material.

85
Q

State 6 things that a business must consider before entering an international market

A
  1. Size/growth potential of the market
  2. Porter’s 5 Forces
  3. Economic Factors
  4. Similarities/Differences with home market
  5. Domestic/International Rivals
  6. Regulations/ Taxes
86
Q

Benefits of simply exporting

A
  1. Low Investment
  2. Using existing systems (warehouses, website and staff)
87
Q

Drawbacks of simply exporting

A
  1. Cost of transportation
  2. Vulnerable to exchange rates
  3. Vulnerable to trade barriers
88
Q

What is direct investment?

A

Setting up production/retail facilities overseas

89
Q

Benefits of direct investment

A
  1. Avoids trade barriers
  2. Control over quality and customer service
  3. Full financial returns received
90
Q

Drawbacks of direct investment

A
  1. Cost of initial investment
  2. Highly risky
  3. Requires understanding of markets and customers
91
Q

What is an alliance?

A

Cooperative agreement or joint venture with an overseas business

92
Q

Benefits of an alliance

A
  1. Reduces risk of failure
  2. Sharing some of the costs
  3. Benefit from overseas partner’s experience + knowledge
93
Q

Drawbacks of an alliance

A
  1. Potential for conflicts (profit sharing ratio/costs)
  2. Limited return (sharing with partner)
  3. Setting up legal agreements + contract
94
Q

What is licensing?

A

Selling the rights for an overseas business to use your patent to produce and sell your product abroad.

95
Q

Benefits of licensing

A
  1. Avoids trade barriers
  2. Source of income (royalty + initial fee)
  3. Outsourcing company has better knowledge
96
Q

Drawbacks of licensing

A
  1. Limited income
  2. Potential loss of intelectual property ( Patent)
  3. Loss of control over the production
97
Q

Offshoring Definition

A

Moving manufacturing overseas

98
Q

Outsourcing definition

A

Someone else manufactures the product/service

99
Q

Benefits for offshoring

3

A
  1. Lower costs
  2. Less legislation
  3. Proximity to suppliers
100
Q

Drawbacks of offshoring

A
  1. Increase in transportation costs
  2. Exchange rate fluctuations
  3. Long lead times
  4. Corporate Social Responsibility (CSR)
101
Q

What is re-shoring?

A

Bringing operations back to the UK.

102
Q

Benefits of re-shoring

A
  1. Shorter lead times
  2. Provides USP (Made in England)
  3. Greater Quality Control
103
Q

What is Bartlett and Ghoshal model for?

A

Gives 4 strategies a business can use for managing an international business.

104
Q

What are the 2 axis for the Bartlett and Ghoshal model?

A
  1. Local Responsiveness
  2. Global Integration
105
Q

What is global intergration in the Bartlett and Ghoshal model?

A
  • Centralised vs Decentralised
  • Same branding/marketing materials
  • cost pressures
106
Q

What is local responsiveness in the Bartlett and Ghosal model?

A

How much adaptation is required for the the product to meet the needs of customers in an overseas market?

107
Q

What is a centralised organisational structure?

A

A structure that keeps decision making firmly at the top of the hierarchy (senior management)

108
Q

2 Benefits of a centralised organisational structure

A
  1. Quicker decision making
  2. Easier to implement common policies and practices for the whole business
109
Q

2 Drawbacks of a Centralised Structure

A
  1. Local/Junior managers are likely to much closer to customer needs
  2. Lack of authority down the hierarchy may lead to lower manager motivation
110
Q

What is Decentralised Organisational Structure?

A

Decision making is spread to include more managers in the hierarchy as well as trading locations

111
Q

2 Benefits of Decentralised Structures

A
  1. Decision making closer to the customer = better customer service
  2. Better able to respond to local circumstances
112
Q

2 Drawbacks of Decentralised Structures

A
  1. Harder to achieve tight financial control
  2. Harder to ensure consistent practises and policies at each location
113
Q

Name the 4 strategies from the Bartlett and Ghoshal Model

A
  1. Global Strategy
  2. International Strategy
  3. Transnational Strategy
  4. Multidomestic Strategy
114
Q

International Strategy

A
  • Low pressure for local responsiveness (to change their product to suit the international market)
  • Low pressure for global integration (to keep costs low)
  • Decentralised decision making

DYSON

115
Q

Global Strategy

A
  • Low pressure for local responsiveness (to adapt their product to the international market)
  • High pressure for global integration (centralised decision making )

APPLE

116
Q

Multi-Domestic Strategy

A
  • Opposite of Global = Decentralised
  • High pressure for local responsiveness
  • Low pressure for global integration

McDondalds/NESTLE

117
Q

Transnational Strategy

A
  • High pressure for local responsiveness (adapting the product)
  • High pressure for global integration (economies of scales exploited/decentralised)

LAYS/WALKERS

Business Studies (4 decks)

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