Scenario Planning Scenario Planning: What is scenario planning: businesses may be subject unforeseen event, which could hamper their activities. Examples might be a fire that destroys promises, I break down the internal backup system that stores business information,...
Continuity Planning Business continuity: when an incident occurs, a business will want to minimise disruption. After safeguarding human life, one of the most important priorities is to get the business up and running again. Some firms which business continuity plans...
Corporate Timescales Corporate Timescales: The outcome of decisions can have a short term and long-term impact on a company. The long-term decisions are those that affect your vision mission and objectives. They could have an impact on the business 5/10 years’ time....
Corporate Culture: Strong and weak corporate cultures: Every place of work has a slightly different culture. Some are friendly, some of disorganised and some are challenging. This reflects organisational culture sometimes also called organisation, corporate or...
Classification of Company Culture There are many ways of classifying organisational culture. One attempt was made by Charles handy in understanding organisations 1993. He argued that there were four main types of organisational culture Power culture: A power culture...
Effects of organizational culture Organisational culture affects business in wide variety of ways. Three of these ways are motivation, organisational structures and change, for example, new management and mergers and takeovers Motivation: Organisational culture...
How corporate culture is formed Many factors contribute to the formation of organisational culture. These include the role of the founding members of the organisation, their personalities and beliefs. Often the strong leader’s attitude will permeate the organisation....
Shareholders versus Stakeholders Internal and external stakeholders: a stakeholder is a person, a group or organisation who can after or be affected by the organization's actions, objectives and policies. Stakeholders can be directors, employees, owners,...
Business Ethics Ethics: ethics, in the context of business ethics, considers the moral rights of wrongs at the decision, focusing on a strategic level, rather than decisions made by, for example, individual employees. Businesses have to make many ethical decisions....
Codes of Practice In recent years large businesses have adopted ethical codes of practice. These lay down how employees in a business respond to situations where ethical issues arise. Ethical codes will differ from one business and one industry to another. However,...
Interpretation of Financial Statements Financial Statements: Companies are required by law to produce financial statements at the end of the financial year – although many PLC’s produce them on a quarterly basis. Statement of Financial Position – (balance sheet)...
Ratio – Analysis: Ratio analysis: Financial ratios: financial ratios can be calculated and used analyse the performance of business is more precisely. A financial ratio is one number divided by another or one number expressed as percentage of another. There are...
Labour calculations Human Resources: Labour productivity: labour productivity is defined as output per worker: Labour productivity = total output per period of time// average number of employees Labour turnover: labour or stuff turnover is another measure of personal...
Causes and Effects of Change The causes of change in business: businesses today have to operate and rapidly changing markets and conditions. They can no longer rely on a constant stream of customers; the same production process was selling the same product over a...
Factors of Change Key Factors in Change: Managing change: Change management is a process of organising and introducing new methods of working in the business. These changes can be driven from within the business or as a result of responding to the...
Critical Path Analysis: Nature and purpose of critical path analysis Network analysis: Businesses often have to complete large project, which involves a series of complicated or activities which must be carried out in a certain order. The use of networks helps a...
Corporate influences One of the main functions of the senior management team in a corporation is to make strategic decisions. These are important, far-reaching decisions as a long-term impact business. For example, if a business decides to build a new factory in an...
Decision Trees Everyday businesses make decisions. Most, if not all, involves some risk. This could be because has the business has limited information on which to base the decision. Furthermore, the outcome of the decision may be uncertain. Launching a new...
Growth: Most business start small then grow. Business like to grow because the benefits can be very attractive, for example revenues will be higher, unit costs are likely to be lower and the business will have a larger profile with a greater market share. Economies of...
Internal Economies of Scale Internal Economies of Scale: Benefits of growth that arise within the firm. Purchasing and Marketing economies of scale: Purchasing in bulk leads to lower average costs Large firms are likely to get better rates when buying raw materials...
External Economies of Scale External Economies of Scale: Positive externalities to firms as the Industry grows. Labour: Industry grows may lead to a higher concentration of workers in the economy who have the skills to be employed – developed skills at other companies...
Inorganic Growth Mergers and Takeovers Merger: Where two firms join and operate together – Lloyds TSB. Takeovers: Where one firm purchase another. A firm must declare to the stock market after it has acquired 3% of a firm to inform shareholders, this may lead to...
Organic Growth Methods of growing Organically: New Customers New Products New Markets New Business model Franchising Advantages of Organic Growth: Reduced Risk – growth of well-known practices – predict markets reactions to methods used; prevent unnecessary...
Reasons for Staying Small: Personal Service Owners preference Flexibility and Efficiency Lower Costs Low Barriers to entry Small firms can be monopolists Easier to differentiate product & develop a USP Flexibility in responding to customer needs Customer...
Quantitative Sales Forecasting Time series Data: Trend Seasonal Fluctuations Cyclical Fluctuations Random Fluctuations Identifying the trend: An analysis of figures will tell a business whether there is an upward, downward or constant trend. Identifying the trend,...
Casual Modelling and Line of best fit Regression – on calculator (CASIO FXCG50): stats, 2 Variable, calc Closer to 1 greater relationship between the two variables Closer to 0 No relationship between the two variables -1 Absolute negative correlation between the two...
Investment Appraisal Investment refers to the purchase of capital goods. Capital goods are used in the production of other goods. For example, a building contractor who buys a cement mixer, some scaffolding, lorry, computer, office furniture and 5 shovels has...
Simple Payback The payback for him refers to the amount of time it takes for project proposal period for example and engineer £500,000 in UK machinery and estimated that will be that will lead to a net cash flow over the next five years. The payback period is 4 years....
When making an investment decision a business might consider what cash flow or profit earned is worth at the present value Advantages of NPV: The discounted cash flow method unlike the payback method and the average rate return correctly accounts for the value of...
Ansoff and Porters Matrix Theories of Corporate Strategy: Business Strategy – Analytical skills are used to identify current market positioning and where it wants to be – Porters 5 forces / SWOT Analysis. The corporate strategy devised from this is the long-term plan...
SWOT Analysis Internal Audit: Analysis of the business itself and how it operates, identifying strengths and weakness of operations and will include: Products and their costs, quality and development Finance including profit, assets and cash-flow...
PESTLE & Porters 5 Forces Impact of external influences Pestle Analysis: This identifies the external factors a business might face and their impact on business idiosyncrasy Political: Some parts of the world are politically volatile and special attention must be...
Objectives Mission Statement - These set out the reasons why a business exists and what it is trying to achieve. Aims and Objectives: Aims are determined by owners and managers They will change over time as the business grows and the business environment...