3.4.1 Corporate influences

• How does long & short term objectives affect a business?

  • Long-term decisions are likely to affect the long-term mission and vision of the business over a period of anything up to ten years
  • Short-term decisions are more likely to impact on objectives and tactics over the next few years at most
• Short - termist approach

  A) profits

  B) minimise

  C) shareholders

  D) rapid

  E) less

  F) supply

  
• Problems with short-termist approach

  • Loss of profitability & competitive edge as lucrative long-term opportunities are ignored.
  • Need to produce and analyse very regular financial reports = managers lack time to consider longer-term corporate strategic direction.
  • Reliance on short-term contracts with suppliers and workers is likely to lead to higher than necessary costs as benefits such as bulk buying discounts cannot be achieved
•  short-termism is an entrenched feature in British businesses and some commentators consider that it is a key reason for sluggish productivity and a lack of willingness to invest in research, training and skills 
• Long-term approach includes

  • Conducting ongoing investment in research and development, innovation and new product development
  • Adopting a long-term outlook with less emphasis on frequent financial reporting
  • Valuing and investing significant resources into the recruitment, training and retention of staff
  • Establishing and nurturing meaningful and lasting relationships with suppliers
• • Evidence-based decision-making involves taking a systematic and facts-based approach when determining objectives, strategy and tactics
• Process of evidence based dm

  • identifies the measurable objective and determines criteria .
  • Data is gathered and analysed to consider range of decisions.
  •  appropriate evidence-based strategic and tactical decision is made and communicated.
  • decision is implemented and carefully monitored and reviewed.
  • outcome of the decision can be used to inform future decision-making 
• Subjective decision making is guided principally by the personal opinions and experiences of key decision-makers
• • Subjective decision-making is often more risky than an evidence-based approach but there are some circumstances where it may be more appropriate
• Situation - making quick decisions

  • Sometimes a swift decision needs to be made to counter rapidly-changing market conditions
• Situation - nature of industry

  • In some industries, subjective decision-making provides the key element of competitive advantage
• Situation - lack or conflict of data

  • some instances, there may be a lack of up-to-date and accurate data to support an evidence-based decision so a well-placed 'hunch' may be the best option a business has
• Situation - persuasive & single minded leader

  • Some businesses are dominated by powerful leaders who make key strategic decisions without consultation and with limited data
  • This is an appropriate decision-making approach where leaders are experienced and trusted and have a good track record