Understanding Business Flashcards
(138 cards)
1
Q
Multinationals
A
A multinational corporations has branches (called subsidiaries) in more than one country. The distinguishing feature of an MNC is that it sets up production facilities in more than one country
ADVANTAGES
- increases market share
- cheaper labour and production
- take advantage of government grants
- avoid or reduce tax
- save costs on transport
- avoid trade barriers
DISADVANTAGES
- languages barriers
- different laws
- fluctuation in exchange rates
- perception of cheaper labour
2
Q
Stakeholders
A
Internal- These are stakeholders from within the business
External- theses are stakeholders from outside the business
INTERNAL
- employees
- manager
- share holder
EXTERNAL
- suppliers
- banks/lenders
- government
- local community
3
Q
Stakeholders:
Employees
A
Interest- good salary, job satisfaction, good working conditions, job security
Influence- They can change the standard of their work, take industrial action
4
Q
Stakeholders:
Managers
A
Interest- Good salary/bonuses,job satisfaction, responsibilities / status
Influence- they make decisions such as hiring staff, selling products etc
5
Q
Stakeholders:
Shareholders
A
Interest- Want the firm to be profitable, healthy dividends, improved share value
6
Q
Stakeholders:
Suppliers
A
Interest- Will want the business to be successful to ensure repeat custom, they depend on the custom for survival
Influence- can change prices, offer discounts, change their lead times
7
Q
Stakeholders:
Banks and lenders
A
Interest- they want to make sure that cash flow is stable so they can ensure repayment
Influence- can choose weather to grant or withhold loans, can extend or shorten the loan repayment period can change the interest rates
8
Q
Stakeholders:Government
A
Interest- Want to receive money through income tax, do not want to pay benefits to unemployment workers
Influence-Set tax rates, introduce legislation that can have an effect on the business, offer or withhold grands
9
Q
Stateholders conflict
A
- Managers want to make high profits
- customers want the best quality for the cheapest prices
- managers may want to close a branch to save money on staff wages
- employees want to keep their jobs
10
Q
Stakeholders interdependenc
A
- Managers will want customers to buy products to make a profit
- Customers want managers to provide them with the product they want
- managers want employees to be as productive as possible
- employees need managers to provide the necessary training
- owners will want suppliers to produce products on time
- suppliers want owners to provide them with repeat custom
11
Q
Tall structures
A
many layers of management which means a long chain of command
- may result in inefficient communication
12
Q
Flat structures
A
- fewer layers of management with a shorter chain of command
- management salaries will be less
13
Q
Delayering
A
removing layers of management
shares money on management salaries
employees feel more empowered with decision making
less opportunity for promotion
wider span of control means that there may be possible supervision issues
14
Q
Problems with overstocking
A
- Expenses increase through costs toed to security, storage and insurance
- increased risk of theft
15
Q
Problems with under stocking
A
- Employees and machinery sit idle if the production has to stop
- customers may not receive their goods on time. this will led to increased complaints
- poor image and reputation and reputation for the business
16
Q
Internal recruitment
A
Organisations advertise the vacancy within the business.
This means that only existing members of staff can apply. This could be done through posting information on notice this could be done through posting information on notice boards or via staff email.
ADVANTAGES
- vacancy can be filled quickly
- successful candidate knows how the organisation work
- organisations know s the strength of the person they appoint
- money can be saved on the costly recruitment process
DISADVANTAGES
-Field of candidates are restricted are restricted. the best candidate for the job may not already workforce of the organisation
- no existing employees may have the skills required for the job
-a further vacancy will be created if an organisation promotes within
conflict may occur if within existing employees completing for a job
17
Q
External recruitment
A
This is when an organisation offers the vacancy to everyone(in and out of the business). These jobs may be advertised in newspapers or on websites
ADVENTAGES
-new ideas can be brought into the organisation
-large pool of people to choose from
recruitment agencies can assist with filling the vacancy
DISADVANTAGES
- existing employees who don’t get the job may be demotivated
- it is costly to recruit through newspapers/ websites
- the successful applicant is unknown, and therefore ultimately be the wrong person
18
Q
Into the pipeline
A
POINT OF SALE MATERIAL
materials manufactures give to the retailer to display their products
SALE OR RETUN PROMISE
manufacturers may give retailers the option of returning products that they feel may not get sold
DEALER LOADERS
manufacturers may offer deals to encourage the retailer to stock their products
STAFF TRAINING
the manufacturer may provide training for retailer staff to ensure they have good knowledge of the products
19
Q
Out of the pipeline
A
FREE SAMPLES
retailers may offer free samples to encourage to buy the products
LOYALY SCHEMES
large retailers often offer loyalty schemes in which customers ca collect points for making purchases in store
VOUCHER
retailers may offer vouchers in newspapers/ magazines which entitle the customers to a discount of future purchases
SPECIAL OFFERS
a variety of discounts or reductions can be offered to customers, often from large retailers such offers are usually short term
20
Q
Product life cycle :
Development
A
The first stage is research development. An organisation will carry out several activities to develop their products
PROFITABILITY
NO SALES and HIGH COSTS
NO PROFIT
21
Q
Product life cycle :
Introduction
A
the newly developed product is launched. the organisation will heavily advertise to make customers aware. sales begin to increase. Innovative products have little/no competition so charge a high price
PROFITABILITY
NO SALES and HIGH COSTS
LITTLE/ NO PROFIT
22
Q
Product life cycle :
Growth
A
Sales are increasing substantially as product becomes popular. costs are beginning to level out out after advertising campaigns. Competitors begin to launch their own or similar products
PROFITABILITY
INCREASING SALES and AVERAGE COSTS
RISING PROFIT
23
Q
Product life cycle :
Maturity
A
this is the peak level of sales. product is extremely well known within the market. organisations may look into possible extension strategies to maintain this
PROFITABILITY
HIGH SALES and AVERAGE COSTS
HIGHEST PROFIT
24
Q
Product life cycle :
Saturation
A
by this stage the product is no longer in demand. it may be that everyone has the product, or it has become out of date. high levels of competition within the market
PROFITABILITY
CECREASING SALES AVERAGE COSTS
25
Product life cycle :
| Decline
at this stage the sales are falling substantially. costs are becoming too high and it is no longer worthwhile for the organisation to continue producing the product
PROFITABILITY
LOW SALES and AVERAGE COSTS
LITTLE/ NO PROFIT
26
Market- led
customer wants and needs are identified through market research
product is produced based upon customer wants
market may have significant competition
27
Product- led
little or no market research needed
product produced according to organisations strengths
little or no competition in the market
28
E- commerce
customers shop online then have the products delivered
having no stores means low overheads
work closely with logistics organisations to distribute their products
ADVANTAGES
gives access to customers worldwide
has the convenience of buying at any time from anywhere
product information is easily accessed and updated
DISADVANTAGES
the customer cannot see or handle the product before hand
customer may encounter internet/computer issues
customer has to wait for delivery
29
Stock management
MAXIMUM STOCK LEVEL
at this level, the highest amount of stock that can be stored is available
MINIMUM STOCK LEVEL
the lowest level of stock that should be stored. if stock falls below this line, there isa danger that production will stop.
RE-ORDER LEVEL
more stock need to be ordered once we reach this level
RE-ORDER QUANTITY
the quantity that needs to be ordered to bring the organisation to maximum stock level
LEAD TIME
the time that passes between ordering stock and it arriving
30
Decision making:
| Strategic
made on a long term basis
```
set out company objectives
made by top MANAGERS (directors/ owners)
effect the entire business
tend to lack specific detail
often proactive to stay ahead of competition
```
WHAT PRODUCTS WILL THE BUSINESS USE?
WHAT TARGET MARKET SHOUT THEY AIM FOR?
31
Decision making:
| Tactical
made on a monthly/yearly basis
made by MIDDLE management
made to achieve the businesses main objectives
often very specific
strategic decision= increase sales
tactical decision= develop more product lines
32
Decision making:
| Operational
made on a daily/weekly basis
made by ALL
often reactive when a change occurs
when an employee is ill, the manager must reorganise the shift rota
33
Public sector organisations
want to make good use of the taxpayers money and provide service that are needed
-want to provide a high quality to everyone in a country
ex- schools, police, defence, fire brigade
CONTROLLED by government
FINANCED by taxpayers
AIMS to provide a service
34
Private sector organisations
wants to turn innovative ideas into successful businesses (fill gaps in the market)
aims to maximise profits, expand the business
ex- sole, trader, partnership
CONTROLLED by owners/ BOD
FINANCED by shareholders
AIMS to maximise profits
35
Cash flow
cash flow is a vital resource for a business. it is needed to run the business on a day to day basis, from achieving long term goals to paying staff wages
it is important that an organisation monitors its cash flow-- making a profit and good cash flow are 2 different things
36
How to improve cash flow
OFFER DISCOUNTS TO CUSTOMERS AS INCENTIVES TO PAY ON TIME
-this will encourage quick payment from customers, so money can be used to fund the activities
SELL ANY FIXED ASSETS THAT ARE NO LONGER REQUIRED
- this will generate only quickly and easily and will not impact production
INCREASE PROMOTIONAL ACTIVITIES
-this will increase awareness of products, could increase sales and therefore cash flow
37
Sources of finance:
| Bank overdraft
this allows the organisation to withdraw more money tax available
ADVANTAGES
-quick and easy to set up
DISADVANTAGES
- usually for a short period of time
- daily charges and/ or interest may apply
38
Sources of finance:
| Trade credit
this allows an organisation an extended period of time to pay for purchases
ADVANTAGES
- can sell products and receive money before paying for materials
DISDVANTAGES
-credit is at suppliers discretion, no is not always guaranteed
39
Sources of finance:
| Retained profit
this is a portion of the previous years profits which can be reinvested into the organisation
ADVANTAGES
-belongs to the organisation
DISADVANTAGES
-relying on profits can be risky as profit may not always be available
40
Sources of finance:
| Government grants
this is given to an organisation to help them set up
ADVANTAGES
- does not have to be repaid
DISADVANTAGES
usually only a one off payment
41
Statement of financial position
shows the worth of an organisation
- asset=own
- liability= owe
42
Statement of financial position:
| Non current asset
something that a business owns.
usually used on a daily basis and has a degree of permanence
-premises, machinery, vehicles
43
Statement of financial position:
| Current asset
something that is owned, but will hopefully be converted to cash in the short term
-this can include stock to be sold, cash in the bank
44
Statement of financial position:
| Current liability
a short term debt. something that is going to have to be paid within a year
45
Statement of financial position:
| Non current liability
a debt that is not due for repayment imminently (a year or more)
46
Statement of financial position:
| Equity
money invested by the owners to set it up. the owner is owed this by the business
47
Statement of financial position:
| Net assets employed
difference in value between the total assets and the total current liabilities. ASSETS should total more than CURRENT LIABILITIES
48
Statement of financial position:
| Reserves
money/profits retained by the business to perhaps buy new assets or protect against future losses
49
Statement of financial position:
| Net assets
the financial value or worth of a business
50
Selection process:
| Interviews
ONE TO ONE
- usually face to face, with one interviewer asking the questions
- can be less stressful for the applicant than a panel interview
PANNEL
- several interviewers sit on a panel and take turns to ask questions
- may involve an interviewer who is external to the organisation
SUCCESSIVE
- several interviews one after the other with a different interviewer each time
- each interviewer may choose to specialise their questions and target different ares/skills
TELEPHONE
- conducted over the phone or using video/audio conferencing
- may be recorded for future review
- saves money on travel and accommodation
51
Selection process:
| Interviews (adv/disadv)
ADVANTAGES
- represents an opportunity for the applicant to find out more about the job and the organisation
- good way to identify the personality and personal characteristics of the applicant and also get a feel of how they match with their applicant
DISADVANTAGES
- applicants can get very nervous and may not perform well at the interview
- sometime the people carrying out the interviews can make unfair judgements based on the performance at the interview, or even the appearance of the applicant
52
Selection process:
| Testing
AMPLITUDE
these are objective tests
- this means each applicants performance can be measure/ compared
- each test is designed to test a particular skill
PERSONALITY
measure the personality of the applicant. gives an insight into their values and beliefs
-used to ascertain whether the person is a team player, or holds any particular strengths/weaknesses
MEDICAL
determines whether or not the candidate is fit and healthy for the purposes of the job
-army/police
53
Selection process:
| Testing (adv/disadv)
ADVANTAGES
- good for making comparisons
- verifies the claims made by the applicant
- tests suitability
DISADVANTAGES
- applicants can be affected by nerves
- poor testing can lead to discrimination
- results can be unreliable
54
Capital intensive
ADVANTAGES
machines can work 24/7
cheaper in the long run
quality of work is consistent
DISADVANTAGES
breakdown of machinery can result in costly repairs
employees can become bored with the repetitive tasks
55
Factors of production:
| Land
the natural resources which the business uses
| e.g.- plot of land, coal,wood,oil and water
56
Factors of production:
| Labour
this is the workforce of the business
| e.g. human resources, employees
57
Factors of production:
| Capital
the man made resources(assets) of the business
| e.g. finances, tools,machinery,equipment
58
Factors of production:
| Enterprise
this is when the entrepreneur will use land, labour, and capital to achieve a business idea, or produce goods or services
59
Sectors of industry:
| Primary
Businesses which extract natural goods from the earth
| e.g. fishermen, farmers, oil drilling, foresters
60
Sectors of industry:
| Secondary
Businesses that are involved with making things(manufacturing)
e.g. shipbuilding, construction, factories
61
Sectors of industry:
| Tertiary
Businesses that do not produce goods, but provide services
| e.g. shops, hotels, hairdressers,banks
62
Sectors of industry:
| Quaternary
Described as being the support sector as it is knowledge based
e.g. IT consultants, accountants, media body, education
63
Sectors of the economy:
| Private
Wants to turn innovative ideas into successful businesses(fill gaps in the market)
- Aims to maximise profits, expand the business
e. g. sole trader, partnerships,private limited companies
64
Sectors of the economy:
| Public
Want to make good use of taxpayers money, and provide services that are needed
- Aims to provide a high quality service to everyone in a country
e. g. schools, police, defence, fire brigade
65
Sectors of the economy:
| Third
Wants to provide support for worthy causes, and promote awareness of good causes
- Aims to provide the best service possible
e. g. charities, voluntary organisations, clubs
66
Types of businesses:
| Sole trader
This is a business that is owned and managed by one person
ADVANTAGES
- relatively easy and cheap to set up
- the owner makes all the decisions
- the owner keeps all the profits
DISADVATAGES
- it is harder to get loans from banks
- unlimited liability
- long working hours/few holidays
- sole responsibility
- problems if owners fall ill(even for a short time)
67
Types of businesses:
| Partnerships
This is a business owned by 2-20 people
ADAVANTAGES
- workload can be shared
- partners can be specialists in different areas
- more money can be invested
DISADVANTAGES
- unlimited liability
- arguments may occur
- profits have to be shared between partners
- partners may leave, upsetting the running of the business
68
Types of businesses:
| Public limited company
A company whose shares are available for purchase by the public on the stock market
- minimum of 2 shareholders
-owned by the shareholders
-controlled by a board of directors
must produce a memorandum and articles of association
ADAVANTAGES
- huge amounts of finance can be raised by selling shares
- Plc's often dominate the market
- easy to borrow money due to their large size
- limited liability
DISADVANTAGES
- set up costs may be high
- no control over who buys shares
- must publish annual accounts
- must abide by the companies act
69
Types of businesses:
| Private limited company
A company whose shares are not available of the stock market
ADVANTAGES
- -control of company is not lost
- more finance can be raised
- limited liability
- BoD brings experience to aid decision making
DISADVANTAGES
- profits are shared amongst shareholders
- shares can't be sold to the general public
- must abide by the companies act
70
Franchise:
| Description
A business agreement that allows the use of an established business(brand) name and to sell their products or services
A franchise is not a type of business, but a way a business can be run
71
Franchise:
| Franchiser
ADVANTAGES
- fast method of expanding without heavy investment
- provides a steady cash flow from royalty payments
- shared risk between franchiser and franchisee
DISADVANTAGES
- only receives a share of the profits
- poor franchisee can damage company reputation
- a week franchisee may not return much profit
72
Franchise:
| Franchisee
ADVANTAGES
- reduced marketing costs
- reduced risk as the brand is already established
- franchiser may produce training and administration duties
DISADVANTAGES
- products, prices and layout of the store may be dictated
- a royalty payment must be paid(% of revenue)
- initial cost is expensive
73
Business objectives:
| Profit maximisation
making the max amount of profit is a main aim for many organisations
ways to increase profit:
- increase sales/selling price
- reduce costs
74
Business objectives:
| Survival
businesses exist to make a profit, but for some,simply surviving is more important
75
Business objectives:
| Social responsibility
it is very important for businesses to be socially responsible, as otherwise they may gain a bad reputation
this can be done by:
- paying fair wages
- supporting a charity
- caring for the environment
76
Business objectives:
| Managerial objectives
some managers may choose to pursue their own aims. This might be to increase their own salary or promotion opportunities. Businesses can benefit if the manager increases sales/profits.
77
Business objectives:
| Satisficing
means to satisfy- aims for a satisfactory result rather than an exceptional one
NHS- they will aim to stay within budget, not to make drastic cut
78
Business growth:
| Why do businesses grow
- to avoid being a takeover target
- to reduce the risk of business failure
- to become the market leader
- to increase profits
- to remove a competitor
- to be able to take advantage of economies to scale
79
Business growth:
| Internal organic growth
- develop new products
- open new branches
- advertise to increase sales
- hire additional staff
80
Key terms:
| Merger
when 2 companies decide to join together
e.g. halifax and bank of Scotland - HBOS
81
Key terms:
| Takeover
this is when a company(usually a larger one buys out a rival
82
Key terms:
| De-merger
occurs when a firm divides or breaks into more than one company
83
Key terms:
| Divestment
when a company sells off an asset to raise finances
84
Key terms:
| Outsourcing
when a company hires another company to do some work for them
85
Key terms:
| Horizontal integration
when 2 companies at the same stage of the production process merge or takeover each other
86
Key terms:
| Vertical integration
occurs when firms at different stages of the production process merge together
87
Key terms:
| Forward vertical integration
when a company buy out or merge with their customers
e.g. - ford=showroom (arnold clarke)
88
Key terms:
| Backward vertical integration
when a company buys out or megs with their suppliers
e.g. ford- rubber plantation which is used to make tyres for their cars
89
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Key terms:
Conglomerate integration(diversification)
```
when firms in different, unrelated markets merge
-this is when a business expands into markets different from its core activity
90
Key terms:
| Franchising
when the franchiser grants another party(franchisee) the right to use its trademark or trade name as well as certain business systems and processes to produce and market a good or service according to certain specifications
91
Outsourcing
ADVANTAGES
- can make your organisation more flexible to change
- saves money on investing in the latest technology, software and infrastructure
- allows you to concentrate on core business activity
DISADVANTAGES
- confidentiality issues
- may be very expense
- the organisation will have reduced control
- firm may take a long time to complete the job
- may involve redundancies
- communication problems may mean the job is not completed to a suitable standard
92
External factors:
| Political
- government legislation
- taxation
- health and safety
- minimum wage
- employment
93
External factors:
| Economic
- inflation rates
- exchange rates
- interest rates
- boom/recession impact (loss of business)
- international trade
94
External factors:
| Social
- changing tastes
- changing fashions
- new trends
- lifestyle choices
95
External factors:
| Technology
- communications
- manufacturing
- product innovations
-they must remain up to date in order to remain competitive
96
External factors:
| Environmental
- natural disasters
- weather
- pollution
- natural resources
97
External factors:
| Competitive
- pricing
- new products
- marketing
- new competitors
- customer service
- product range
- new outlets
98
Internal factors:
| Finance available
- the level of finance available to support a decision will impact upon the decision that can be made
- its possible that we will not have the finance required to carry out the decision that we have decided upon.
99
Internal factors:
| Labour available
- staff must be highly trained/skilful
| - do we have enough staff?
100
Internal factors:
| Information available
- if a business possess good quality market research information, then thy will be more capable of responding to customers needs
- the more information that we possess, the better the chance that we are going to make a good/correct decision
101
Internal factors:
| ICT and technology available
-the degree of ICT used within a business can influence the quality and quantity of products produced
102
Internal factors:
| Management and leadership
- good decisions made by management can have a positive impact on the business
- this can be based on manager's skills/ experience
103
Corporate culture
This is the shared values and beliefs of the business and its staff
This is affected by:
- historic decision making process
- the size and nature of the business
- the number of employees involved in the decision making process
- the management structure
- the flexible working practices, employed by the business
104
Corporate culture:
| why it is important
- employees feel part of the organisation. This increase loyalty and minimises staff turnover
- positive relationships are built. This leads to better communication and decision making
- consistency throughout the organisation means employees can easily work in different locations with minimum fuss
105
Structures:
| By function
Arranging the business according to what each section or department does.
ADVANTAGES
- specialisation- each department focuses on its own work
- accountability- someone is responsible for the section
- clarity-know your and others roles
DISADVANTAGES
- closed communication could lead to lack of focus
- departments can become resistant to change
- coordination make take too long
- gap between top and bottom
106
Structures:
| By product/service
Organising according to the different products made
ADAVANTAGES
- expertise can develop in dealing with each product/service
- managers can easily identify how each product is performing
- decisions can be more responsive to changes in the business environment
DISADVANTAGES
- duplication of functions(e.g. different sales force for each division)
- divisions may find themselves competing with each other
- lack of central control over each separate division
107
Structures:
| By place
Geographical or regional structure
ADVANATGES
- serve local needs better
- more effective communication between firm and local customers
- better knowledge of local staff
DISADVANTAGES
- conflict between local and central management
- duplication of resources and functions
108
Structures:
| By customers
Where different customer groups have different needs
ADVANTAGES
- can cater for more specialist provisions service to meet customers expectations
- more effective in dealing with complex operational needs
- can be ideal for dealing with specific needs of customer groups
DISADVANATGAES
- can be costly to implement
- duplication of resources and functions within each specialist customer area
- can ignore the requirements of individual customer types
109
Structures:
| By process
Where products have to go through stages are they are made
ADVANTAGES
-it organises products by category an therefore creates an environment in which employees and managers can become experts in their product area
DISADVANTAGES
-it can create completely separate processes from other product lines within the organisation
110
Matrix structure
People with particular skills are placed in a project team to carry out a task
ADAVANTAGES
- there is nor hierarchy- everyone in the project team has the same level of responsibility and authority
- individuals will get the opportunity to work in a variety of project teams over a period of time. This promotes personal staff development and increases job motivation and satisfaction
DISDVANTAGES
- can be costly to set up as each project team may need support staff such as IT
- can be difficult to coordinate employees from different functional ares
e.g. construction-bridges,schools, hospitals
111
Entrepreneurial structure
This is common for businesses where decisions have to be made quickly
- decisions are made centrally with very little input from staff, and are based o the expertise of only one or two individuals
- too heavy a workload is placed on too few individuals who have responsibility for decision making
- only one or two people making all the decisions
112
Structure ket terms:
| Authority
the right to make decisions and carry out tasks
113
Structure ket terms:
| Span of control
the number of people a superior is responsible for
114
Structure ket terms:
| Chain of command
the relationship between different levels of authority in the business
115
Structure ket terms:
| Hierarchy
shows the line management in the business and who has specific responsibilities
116
Structure ket terms:
| Delegation
authority to carry out actions passed from superior to subordinate
117
Structure ket terms:
| Empowerment
giving responsibilities to people at all levels of the business to made decisions
118
Structure ket terms:
| Line relationship
vertical line on an organisational chart
119
Structure ket terms:
| Functional relationship
horizontal line on an organisation chart
120
Decision making:
| Centralised
- important decisions are made at the head office by senior management
- very little delegation which can lead to staff demotivation
- easier to promote a corporate image
121
Decision making:
| Decentralised
- important decisions delegated to departments and subordinates
- associated with flat structures
- can be difficult to ensure consistency across departments
- employees are motivated and empowered
122
Tall organisations
- many layers of management which means a long chain of command
- may result in inefficient communication
123
Flat organisations
- fewer layers of management with a shorter chain of command
- management salaries will be less
124
Delayering
Moving from a tall to a flat organisation
-removing layers of management
ADVANTAGES
-saves money on management salaries
-employees feel more empowered with decision making
DISADVANTAGES
- less opportunity for promotion
- wider span of control means that there may be possible supervision issues
125
Decision making
STRATEGIC
where do we want to be?
- what products will the company produce in the future?
-to max sales
-to increase market share by 20% in 5 years
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TACTICAL
how will we get there?
-increase selling prices
-increase the number of staff employed
-reduce costs
-issue more shares
```
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OPPERATIONAL
what do we have to do?
-arranging work rotas
-dealing with customer complaints
-ordering materials from suppliers
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126
SWOT
- a planning tool(present and future)
- assess for potential risk and rewards
- considers effectiveness/success in relation to the business environment (achieving its objectives)
- helps evaluate and adjust strategies
- helps a company to operate in a competitive environment
127
SWOT:
| Purposes
- identify strengths, weaknesses, opportunities and threats
- build on strengths, minimise weaknesses, grasp opportunities and avoid counter threats
- assist with the decision making process
- by identifying opportunities early, the company can gain a competitive edge
- turn threats into opportunities
- turn weaknesses into strengths
- proactive decision making rather than reactive
128
POGAADSCIE:
| Advantages
- no rash or hasty decisions are made as time is taken to go through the decision making process
- better quality decisions are made as they are based on relevant gathered information
- opportunity to explore alternatives
- may enhance innovation, motivation and receptiveness by allowing employees to be involved in the decision making process
129
POGAADSCIE:
| Disadvantages
- time consuming, may slow down the decision making process
- limited information available
- internal contraints:finance, policy, staff attitudes/resistance
- external restraints:legislation, competitors, lack of technology
- problems of generating and choosing between alternative solutions
130
what factors influence the quality of decision making?
- the accuracy and quantity of information gathered
- limited technology
- staff training
- risk taking
- time and finance restrictions
131
Role of the manager:
| Planning
setting forward plans in relation to the business objectives
132
Role of the manager:
| Organising
collecting, storing, and processing information
133
Role of the manager:
| Commanding
being the leader
decision making
setting vision and supporting staff
134
Role of the manager:
| Co-ordinating
making sure staff and resources are in the right place at the right time
135
Role of the manager:
| Controlling
ensuring the plan is on target and in budget
| monitoring the quality of work
136
Role of the manager:
| Delegating
delegates authority in order to achieve objectives
137
Role of the manager:
| Motivating
motivates staff
138
ICT and decision making
spreadsheets- check if there is enough finance
databases
word processes- prepare reports
Internet- compare prices of suppliers to see the cheaper option
intranet- communicate within the business
e-mail- communicate with suppliers quickly
video conferencing- involve everyone who should be involved without having to reschedule(saves time)
