Chapter 1:

CSR:
It is the state of being ethical / making socially responsible decisions that will affect
shareholders positively. It is when businesses make decisions affecting the whole society as a
whole positively, attracting stakeholders and pressure groups.
Advantages:
 Better reputation with government so can get tax exemptions
 Better brand image —> more workers and customers attracted
 Impresses pressure groups so better reputation —> motivates workers
 Attracts investors
Disadvantages:
 High compliance costs - materials
 Resistance from some shareholders as overall profits may be low in order to remain
ethical - may have to buy expensive resources

Difficulties faced by new businesses:

 Lack of capital as it may be expensive
 Competition from MNCs

Opportunities and threats when entering new markets:

Opportunities:
 Can become market leader & price leader
Threats:
 Risks involved

Private limited company is a company that has shareholders between 1 to 20 and only family
or friends. Benefit from limited liability.
Public limited company is where the shares can be sold to the public and anyone can invest.
Benefit from limited liability.
Advantages:
 More finance & capital
 Limited liability
 Economies of scale
Disadvantages:
 Disagreements between shareholders
 Diseconomies of scale

Why do firms have extension strategies?

When a product is reaching the maturity stage and is about to decline, they use extension
strategies such as redesigning/repackaging or adding value through extra features to keep
consumers interested and sustain profits.
Why businesses change their objectives overtime?
 Growth and size of business
 Laws and regulations
 Technology
 Change in senior management

Corporate culture: consists of the norms of an organisation, how people work in a company.
It refers to the beliefs and knowledge of individuals within and organisation

Growth of multinationals:
 Is because of economies of scale
 Research and development

Consequences of culture clashes:

 Demotivation
 Competitive disadvantage
 HOWEVER, they can adapt each others styles

Joint venture/ Strategic alliance:

Advantages:
 Synergy
 Economies of scale
 Greater market share
Disadvantages:
 Culture Clash
 Diseconomies of scale
 Redundancies

Advantages and Disadvantages of informal organisations:

 Flexibility to change or speed up a process
 Increases motivation
 Creative thinking
HOWEVER
 Too informal —> not taking seriously

Advantages and Disadvantages of public private partnership:

 Synergy
 Economies of scale
HOWEVER
 Conflict of interest
 Diseconomies of scale
Internal recruitment:
Advantages:
 already to specifics of business
 cost effective
Disadvantages:
 internal politics
 no new ideas - dead wood

External Recruitment:
Advantages:
 New ideas
 large pool of applicants
 wide variety of experience
Disadvantages:
 Not to specifics of business
 time consuming
 expensive

Small businesses:
Advantages:
 no financial risks
 Personalized services
 Flexibility
 Government aid
Disadvantages:
 Low revenue and market share
 No economies of scale

Intuitive decision-making:
relies on the “gut feeling” or natural instinct of the leadership team when making decisions
and relies on previous decisions

Internal growth:
Advantages:
 Maintains corporate culture
 Better control and coordination
Disadvantages:
 Diseconomies of scale
 Slower growth
Mission Statement:
Advantage
 mission statement can provide a sense of direction and can be motivating for the
workers.
Cost:
 The mission statement may be seen as unrealistic and too ambitious for different
stakeholders to believe in it.

Leaders and Managers:

A leader is someone who influences and inspires others to get things done. A leader fosters
motivation, respect, trust and loyalty from the workforce.
Managers focus on problem-solving and decision-making, so involves a process of planning.
Managers tend to focus on achieving specific goals within a definite time frame.

Chapter 2:
Autocratic Leadership: Formal systems of control, avoiding discussions and communication is
top-down and one way only.
Advantages:
 Clear sense of direction
 Quick decision making
Disadvantages:
 Demotivating
 No new ideas

Democratic Leadership: involves workers in decision making, delegate and empower staff
however they leaders make the final decisions.
Advantages:
 Motivates workers
 New ideas
Disadvantages:
 Time is a log
 Disagreement

Lassiez-Faire leadership: involves delegating authority to staff, management doesn’t get

involved
Advantages:
 New ideas
 Freedom & motivation
Disadvantages:
 No sense of direction
 Low productivity
CONFLICT RESOLUTION:
 One resolution could be a discussion and negotiation / consultation within MHS.
Some employees’ representatives may attempt to negotiate contracts based on job
analysis, job description, personal specification as well as possibly 360 degree
appraisal system. However may not reach to a concluison
 Conciliation is a process whereby the parties involved in a dispute agree to use the
services of an independent mediator. he arbitrator acts rather like a judge by listening
to and examining the arguments put forward by both parties before making a final
decision or recommendation. bias
 No strike agreement. 

 Empowerment is developing the potential of workers —> workers can make their
own decisions

Off the job:

Advantages:
 New skills by experts
 Up to date technology
Disadvantages:
 Costly & no productivity
 Not to specifics of business
 People can take the training and find other jobs

On the job:
Advantages:
 Specifics of business
 Saves on costs
 Productive on the job training
Disadvantages:
 Bad habits from trainer
 Loss of productivity for workers

Outsourcing: is the practice of transferring internal business activities (functions) to an

external firm as a method of reducing costs.

Offshoring: Same but abroad

Advantages:
 Carried out by specialists so better quality
 Business is focusing on core activities
Disadvantages:
 Hard to manage quality
 Redundancies so high labour turnover

Re-shoring: reversal of offshoring

Advantages:
 Can focus on better quality
 Costs are reduced
Disadvantages:
 Can’t focus on core activities
 Expensive

 Go slow/slowdowns: the employees at CM will work at the minimum speed allowed

under their contract.
 Work-to-rule: the employees of CM follow their contract / rules and regulations
without giving any goodwill to CM.
 Overtime bans: refuse to work overtime when asked to by management.
 Negotiation: through the process of collective bargaining. It is the least disruptive
form of industrial action both to the employees and to the CM. Moreover, the
employees are already members of a trade union. Hence, the infrastructure for
negotiation has already been established.

Chapter 4:
E-commerce:
It is the trading of goods and services on an online website usually over the internet. There
are three types: business to business (B2B), business to consumer (B2C) and consumer to
consumer (C2C)
Advantages to firm:
⁃ Low fixed and variable costs
⁃ Wider customer base
⁃ Customers can shop 24/7
Advantages to customer:
⁃ Price transparency —> can compare prices from other firms
⁃ Wider choice of goods
⁃ Available 24/7
Disadvantages to firms:
⁃ Costs to set up —> skilled ICT professionals take more money as well as to maintain/
update website and make sure there is no fraudulent activity
⁃ Job losses as they would have to make workers redundant —> lower motivation and
higher labor turnover
Disadvantages to consumers:
⁃ Security issues
⁃ Waiting time
⁃ Delivery costs

Below the line:

Non mass media promotions —> Money off coupons, buy one get one free, sponsorships,
price deals etc
Above the line:
Mass media promotions —> TV, radio, newspapers, magazines etc

Guerrilla marketing:
Guerrilla marketing: are unconventional and untraditional methods of marketing usually
favoured by small businesses and they are done by not trying to make the customer aware
that the business is doing this
Advantages:
 Guerrilla marketing can be very inexpensive and is often free. It can get consumers
excited and maybe forget about the critism that BETA is facing
 It can lead to viral marketing, I.e. word of mouth marketing that facilitates and
encourages people to spread a marketing message
Disadvantages:
 Guerrilla marketing does not always reach the right target market.
 There can be a large opportunity cost in terms of the time and resources spent in
devising an original campaign. Spending lots of time and money to raise publicity does
not necessarily bring in more customers for the business.

Price discrimination in Enigma:

 Loyalty in poor areas
 Higher revenues

Disadvantages of psychological pricing:

 Unethical
 Low quality
 Low flexibility

Appraisals: formative assessments to test workers and their productivity

Advantages:
 Set targets and follow feedback
 Allows managers to motivate workers whilst giving them good feedback
Disadvantages:
 Time and energy waster
 Not useful if feedback not taken into consideration

Advantages and disadvantages of long distribution channels:

 The transportation costs and the storage costs are decreased
HOWEVER
 The producer takes a risk in passing on the responsibility of marketing its products.
Wholesalers might not promote the manufacturer's products in a way that it might
want, thereby ruining the producer's efforts.

Redesigning a product can lead to completely changing the looks of a product - making it
more bright and colourful or perhaps fitting to the product can increase sales
Advantages:
 Attracts new customers
 Streamlining messages
Disadvantages:
  Confusing for original customers
 Costly

Identical marketing mix:

Advantage:
 Brand recognition
Disadvantage:
 Legal
 Diff cultures

Focus groups advantages and disadvantages:

 Face to face feedback - immediate and in-depth
HOWEVER

 Only small number so may not be able to represent whole segment / target market

Advantages for wholesaler:

 reduce storage cost
 wholesaler breaks bulk therefore more locations so more sales
 they want to sell to whole US therefore makes it easier for distribution so can focus
on core activities
Disadvantages:
 no customer feedback
 higher prices to consumers bc they have to pay to wholesaler
 may have diff priorities

Seasonal Variations
 Seasonal variations are to adjust the predicted sales from the trend to make a more
accurate prediction for seasons
 cyclical fluctuations occur in the sales figures due to the variation in the business /
economic cycles.

Benefits of sales forecasting:

 Improved stock control as it ensure that the correct level of stocks are used for
production at peak times
 Improved productive efficiency as the ability to plan means better use of resources
 helps with external sources of finance
 Improved budgeting as it helps managers to anticipate changes in economy

Disadvantages of sales forecasting:

 Garbage in garbage out - If the data and information used to predict sales forecasts
are outdated
 Limited information - Sales forecasting is a prediction based on past data and trends.
Sales forecasting does not reveal the whole picture