Theme 3 Topic 10 - Corporate Influences and Culture Flashcards
(30 cards)
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
Define Subjective Decision Making
Where the personal opinions of the key decision maker strongly influence the course of action chosen
When are three situations where subjective decision making is appropriate?
When there is a lack of information, An entrepreneur might have experience and insight, Some decisions have to be made quickly
Define Culture
The values, attitudes and beliefs of the people who work for a business, ‘The way we do things round here’
What are four sources of culture?
Company routines, Communication and teamwork, Organisational structures, Power structure
What are four ways culture is formed?
Types of ownership, Leadership styles and beliefs, History and tradition, Nature of the product
What are three ways culture can be changed in a business?
Introduce a new leader, Create a new workforce, Train the workforce
What are three difficulties in establishing a culture?
Resistance to change, Cost of change, Time taking
What are four characteristics of a strong culture?
Staff understand and respond to culture, Little need for policies and procedures, Consistent behaviour, Culture is embedded
What are three characteristics of a weak culture?
Little alignment with business values, Inconsistent behaviour, A need for extensive bureaucracy and procedures
