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Influences 3.4
Theme 3
| Question | Answer |
|---|---|
| What are Corporate Influences? | Factors that affect what managers should take into account when making strategic decisions |
| State five examples of Corporate Influences | Objectives Ethics Culture Financial performance Resources available Relative power of stakeholders |
| What is short- termism? | Pressure on a business to perform in the short term e.g. maximise profits and shareholder returns |
| Short termism may be at the cost of long term growth for example it could be...? | Profits are used to issue dividends rather than reinvested in the business to fund growth Lack of investment in R&D Lack of investment in training or adopt a hard HR strategy |
| What is long termism? | Decision making is focused on achieving the long term vision and objectives of the business |
| What are the features of a business that focuses on long termism? | Heavy investment in R&D for product and process innovation Soft HR strategy in order to recruit and retain top talent Build long term relationships with suppliers and other external stakeholders |
| What is Evidence-based decision making? | Scientific decisions that are backed by research Outcomes can be simulated or tested Reduces but does not eliminate risk Decisions are objective |
| What is Subjective decision making? | Based on intuition Quicker decisions can be made An experienced manager may understand the market Dominant leaders may push decisions forward May be necessary in a fast moving environment or to avoid missing opportunities |
| What is Corporate culture? | The values and standards shared by people and groups within an organisation |
| The culture of a business affects the way in which the business operates. This includes things such as......... | Decision making Organisational structure Communication Leadership styles Attitude towards work Workforce performance |
| Why is corporate culture important? | Impacts staff motivation Effects decision making Brand Image Competitiveness of the business |
| What are the features of a strong culture? | Staff respond positively to organisational values Shared sense of responsibility towards vision, mission and objectives Motivated and loyal workforce Greater efficiency Accept roles and responsibilities willingly Abide by policies “Everyone buys int |
| What are the features of a weak culture? | Little alignment with organisational values Employees have to be forced to perform duties Greater management control and supervision Treat the organisation as a source of income only |
| What is task culture? | Emphasis on achieving set outcomes through cooperation and team work. |
| What is role culture? | Clear rules and procedures result in a clear hierarchy where the organisation functions based on each individual’s role within a clearly defined structure. |
| What is power culture? | A few people central to the organisation have control. |
| What is entrepreneurial culture? | Risk taking and innovation are actively encouraged and rewarded, whilst failure is not criticised. |
| What type of structure would be most appropriate for Task Culture? | Matrix Structure |
| What leadership style is most appropriate for power culture? | Autocratic Leadership |
| What can influence organisational culture? | Mission statement and corporate objectives Personal attitudes, beliefs and priorities of the leaders Norms within society Ownership and size of the organisation Geographical scope i.e. local, national or global Competitive environment |
| How is corporate culture formed? | Personalities and beliefs of the founders and leaders Behaviours of founders and leaders on an ongoing basis Recruitment and training in line with culture Day to day actions of all employees Accepted norms in day to day attitudes and behaviours |
| What are the difficulties in changing an established culture? | Resistance to change Lack of trust Misunderstanding of reason for change Period of adjustment Difficult to change habits that may have been embedded over a long period of time Alienation of:Suppliers and Customers |
| What is a stakeholder? | Any individual or group with an interest in the actions of the business |
| State three internal stakeholders | Employees Managers Owners |
| State five external stakeholders | Customers Suppliers Shareholders Government Local community Society Creditors |
| What is the stakeholder concept? | This suggests that a business’ responsibilities are towards all of its stakeholders/Therefore, the business must consider all of its stakeholders in its decisions and objectives |
| What can a business do to abide by a Stakeholder concept? | 1.Consult with stakeholders before making strategic decisions 2.Treat stakeholders fairly e.g. prompt payment to suppliers, fair pay and conditions for employees 3.Address the business’ impact on the wider community e.g. environmental footprint |
| What is the shareholder concept? | This concept suggests that a business’ responsibilities are solely aimed at meeting the requirements of the shareholders/Therefore, it has profit maximisation as its main corporate objective |
| What is income growth? | Higher profits will lead to higher dividends and shareholders will receive income growth which is an increase in the income received from dividends |
| What is Capital growth? | Good performance of the company will see its share price rise and shareholders will receive capital growth which is a rise in the value of their assets |
| What is a Trade Off? | A trade-off is when one decision results in the loss of an alternative outcome/For each decision made there may be multiple trade-offs |
| What is Corporate Social Responsibility? | The continuing commitment by business to behave ethically and contribute to economic developments while improving the quality of life of the workforce and their families as well as of the local community and society at large |
| What are the reasons for Corporate Social responsibility? | Financial benefits/HR Benefits/Marketing benefits/Operational benefits |
| What are the financial benefits of CSR? | Ability to attract investments Avoidance of fines and environmental taxes Mistakes and bad PR are expensive |
| What are the HR benefits of CSR? | Recruitment and retention of staff - attract a wider pool of talent and skills Motivation of staff |
| What are the marketing benefits of CSR? | Greater customer loyalty Potential for differentiation and using CSR as a USP allowing for premium pricing Positive rather than negative media attention and PR Recognition from external bodies e.g. Fair Trade Foundation, Investors in People |
| What are the operational benefits of CSR? | Lower production costs through efficient procedures and recycling Positive relationship with suppliers |
| What are the financial costs of CSR? | Looking after employees e.g. training, pay and working conditions Ethical suppliers, direct and throughout the supply chain Product safety Environmentally friendly practices throughout the business’ operation |
| What pressures does a business face to be socially responsible? | Consumer actions Pressure groups Government actions Media coverage Investors |
| What is the opportunity cost with regards to CSR? | Time spent on CSR, policies, reports and monitoring |
Created by:
durquhart1
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