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Question		Answer
Disclosure limit of shareholding for financial statement in the UK. start learning		3%
Strategic drift start learning		Strategic drift can be defined as a gradual deterioration of competitive action that results in the failure of an organization to acknowledge and respond to changes in the business environment. Homogeneous mindset at managerial and board levels.
Key factor to consider in PESTEL – political start learning		Changes to government policy
Key factor to consider in PESTEL – economic start learning		Booms or recessions
Key factor to consider in PESTEL – social start learning		Changes to taste and fashion
Key factor to consider in PESTEL – technological start learning		New hardware and software capabilities.
Key factor to consider in PESTEL – environmental 2 start learning		Geographic location.\| Use of resources.
Key factor to consider in PESTEL – legal start learning		Restriction or extra regulations
What instrument is used to analyse potential impacts on future growth? It identifies the main drivers in the external environment. start learning		Pestel analysis.
What instrument is used to analyse potential impacts of future margins? start learning		Porter's 5 Forces analysis.
What instrument is used to analyse potential new foreign markets for expansion? start learning		Porter’s diamond.
What instrument is used to analyse the ability to cope with changes in the external environment? start learning		Strategic capabilities
What instrument is used to determine the source of competitive advantage or disadvantage? start learning		Value chain analysis.
What instrument is used to bring together the internal and external analysis in order to understand overall strategic position? start learning		SWOT analysis.
Porter’s diamond factor conditions examples start learning		Basic factors: weather, local raw materials. Advanced: telecommunications, education system.
CSFs start learning		Critical Success Factors Strategic Focus (Leadership, Management, Planning); People (Personnel, Staff, Learning, Development); Operations (Processes, Work); Marketing (Customer Relations, Sales, Responsiveness); Finances (Assets, Facilities, Equipment).
HRM start learning		Human Resources Management
CPD start learning		Continuing professional development
What is an Organisational Profile in case of Baldrige performance excellence? start learning		Relationships, Environment, Challenges. RECh
No frills CSFs 2 [Competitive strategy] start learning		Finding cheaper alternatives \| Eliminating all waste.
No frills key threats: 2 [Competitive strategy ] start learning		Changes in buyer preferences \| Loss of barriers to entry.
Low cost CSFs 3 [Competitive strategy] start learning		Economies of scale \| A focus on cost reduction \| Eliminating all wastes
Low cost key threat: [Competitive strategy] start learning		Larger rivals e.g. international
Hybrid CSFs 3 [Competitive strategy] start learning		Economies of scale \| Branding \| Service levels.
Hybrid - threats: 3 [Competitive strategy] start learning		Loss of brand \| Difficult to achieve \| Target for all rivals
Differentiation CSFs: 3 [Competitive strategy] start learning		Innovation \| Branding \| Marketing.
Differentiation key threats: 2 [Competitive strategy ] start learning		Being copied by rivals. \|\| New technology.
Focused differentiation CSFs 2 [Competitive strategy ] start learning		Market knowledge \| Unique products and services.
Focused differentiation key threats: 3 [Competitive strategy ] start learning		Recession \| Small market size \| Few barriers
Existing product and existing market. (growth strategy) start learning		Market penetration
Market penetration best use when...? 2 start learning		Best used when market is growing \| Introduce a new or improved product
Market penetration risks: 2 start learning		Competitors will react \| Can lead to stagnation.
New product and existing market growth strategy start learning		Product development.
Product development is used when we have...? 2 [growth strategy] start learning		New and improved products \| Copy rivals.
Product development risks: 2 [Growth strategy ] start learning		Unknown demand \| Can cannibalise existing products
Existing product and new market. [growth strategy] start learning		Market development.
Strategic alliances are often used to...? start learning		... to reduce risk.
Market development risks: 2 start learning		Puts a strain on stratigic capabilities. \| Need new external analysis.
New product and new market growth strategy start learning		Diversification
Diversification risks: 3 [growth strategy] start learning		Very different CSFs \| Need new external analysis \| Can reduce flexibility.
Forward diversification examples: start learning		A farmer who directly sells his crops at a local grocery rather than to a distribution center that controls the placement of foodstuffs to various supermarkets. Or, a clothing label that opens up its own boutiques, selling its designs directly. Forward integration is a business strategy that involves a form of vertical integration whereby business activities are expanded to include control of the direct distribution or supply of a company's products.
Backward diversification example start learning		A company might buy their supplier. Companies often complete backward integration by acquiring or merging with these other businesses, but they can also establish their own subsidiary to accomplish the task. BD is a form of vertical integration in which a company expands its role to fulfill tasks formerly completed by businesses up the supply chain. It is when a company buys another company that supplies the products or services needed for production.
Horizontal diversification start learning		Horizontal diversification is the acquisition of a business operating at the same level of the value chain in the same industry. Procter and Gamble’s 2005 acquisition of Gillette is a good example which realized economies of scope. Because both companies produced hundreds of hygiene-related products the merger reduced the marketing and product development costs per product.
Conglomerate diversification start learning		Conglomerate diversification is unrelated diversification: the businesses which are joined together have no connection whatsoever. An example would be a supermarket joining with a car manufacturing company. Little or no synergy with its core business or technology.
GRI start learning		Global Reporting Initiative
Corporate Social Responsibility short definition and goals. 2 start learning		International private business self-regulation. \| Goals of a philanthropic and charitable nature. CSR
Cross directorship start learning		This is when an executive director of Company A serves as a NED in Company B and, at the same time, an executive director of Company B serves as a NED at Company A. Such a relationship is considered to make the two boards too intimately involved witheach other and potentially reduces the quality of the scrutiny that the two NEDs involved in the cross-directorship can bring.
Environmental footprint accounting 2 start learning		It measures the demand on and supply of nature. On the demand side, the Ecological Footprint measures the ecological assets that a given population requires to produce the natural resources it consumes (like food). On the supply side, a city, state or nation’s biocapacity represents the productivity of its ecological assets (e.g. cropland). These areas, especially if left unharvested, can also absorb much of the waste we generate, especially carbon emissions.
Organic growth characteristics 3 (development method) start learning		Popular with employees. \| Slow but less risky. \| no valuation problem 3) you are not buying goodwill which could be destroyed later or which may never have existed.
Acquisition characteristic [development method] start learning		Quick but expensive. Useful if you are expanding into another country or product line \| You have to pay for goodwil but it is usually difficult to value \| There is an asymmetry of information: sellers usually knowing more than buyers. This increases the risk to the buyer.
Leader definition by Buchman and Huczynski: start learning		Someone who exercises influence over other people.
Leadership traditional definition start learning		An interpersonal influence directed toward the achievement of goals.
3 keywords from leadership definition: start learning		Interpersonal \| influence \| goal
Interpersonal from leadership definition start learning		Interpersonal means between persons. Thus, a leader has more than one person to lead.
Influence from leadership definition start learning		The power to affect others.
Goal from leadership definition start learning		Goal is the end one strives to attain.
Problems with traits theories: start learning		There will always be counter-arguments - one theorist will say a leader should always be courteous whereas another will say that a rude and effective leader was identified.
Behaviour / style theories: 2 start learning		Theory focuses on how leaders behave, and assumes that these traits can be copied by other leaders. \| It suggests that leaders aren’t born successful, but can be created based on learnable behavior.
Tells (autocratic) management style: start learning		The manager makes all the decisions and issues instructions which are to be obeyed without question.
Sells (persuasive) management style: start learning		The manager still makes all the decisions, but believes that team members must be motivated to accept them in order to carry then out properly.
Consults (participative) management style: start learning		The manager confers with the team and takes their views into account, although still retains the final say.
Joins (democratic) management style: start learning		The leader and the team members make the decision together on the basis of consensus.
Problems with behavioural theories: start learning		Unfortunately, as with trait theories, it is possible to find counter examples. E.g. Steve Jobs demonstrating the least effective style (autocratic) but running the largest technology company in the World.
Contingency / contextual theories: start learning		The modern consensus is that there is no one best style of leadership that is equally effective for all circumstances. \| A theory that is a mixture of both trait and behavioural is the situational approach.
What instrument it is used to respond a risk? start learning		TARA framework
risk response – Transfer 3 start learning		Insurance. \| Outsource operations. \| Joint ventures (partial transferring).
risk response – Avoid TARA framework start learning		The risk has been assessed as being so serious that all possibility of the event occurring should be avoided.
risk response – Reduce. Give one example. TARA framework start learning		Take steps to mitigate the risk. For example, instead of installing a new computer system in every branch over one weekend, run a pilot operation then gradually extend.
risk response – Accept TARA framework start learning		Don’t do anything about the risk. It’s just part of everyday business.
People role of NEDs start learning		To oversee the appointment and remuneration of executive directors.
Join venture, Strategic Alliance, Partnering characteristic 3 start learning		Share skills \| and costs \| but difficult to agree.
Cash-cow 3; [BGC matrix] start learning		Strong position in a low growth (therefore unattractive) market. \| Little threat from rivals. \| Just keep the product ticking over and collect the cash.
Key advantage of IRR start learning		Tells us the highest acceptable cost of capital.
NPV key disadvantage: start learning		Relies on a cost of capital estimate.
Payback period key disadvantage: start learning		Requires a target or benchmark.
ARR key disadvantage: start learning		Profits are easily manipulated.
IRR key disadvantage: start learning		It is not useful for comparing projects.
Dealing with risk in decision making. An expected value summarises all the different possible outcomes by calculating a...? start learning		_a single weighted average It is the long run average (though not necessarily the most likely result).
Complicated scenarios in dealing with risk in decision making could be represented as...? start learning		as decision tree. Decision trees force the decision maker to consider the logical sequence of events.
Key limitations in dealing with risk in decision making: 3 start learning		Useful only for one-off decisions. \| Based on subjective information. \| Ignores attitudes to risk.
Who is the ultimate principal in the public organizations? 2 start learning		Tax payer. \| Customers. 2. e.g. Railway passengers.
Ultimate difference between CEO and chairman. 2 start learning		The chairman has the ultimate role of leading the board, \| whilst the CEO leads the business.
Efficiency gains unimportant start learning		Working with lower costs to make more profit. The usual way is to employ fewer staff by making staff redundant.
The distinction between CSR strategy and strategic CSR with examples. start learning		CSR strategy is to have set of policies which guide CSR activities. \| E.g. a company might have a policy to invest in some particular communities. \| Strategic CSR is when company support the main business areas. \| Bank might favour financial education. It would be seen as strategically wasteful to use CSR to support activities which are not aligned to the core activities.
Environmental risk example: start learning		the release of dangerous chemicals into the local river.
Competitor risk example: start learning		a competitor launches a fantastic product.
Product risk example: start learning		you launch a poor product
Economic risk example: start learning		interest rates being increased so that consumer demand is suppressed.
Commodity risk example: start learning		the supply and price of raw materials change adversely.
Political, cultural and legal risk example: start learning		becoming illegal or unpopular
Financial risk example: start learning		you are exporting and the buyer’s currency weakens before you are paid.
Investment risk example: start learning		subsidiary is bought but it turns out that it isn’t as good as you thought it would be.
AC and RC report to...? Remuneration committee start learning		to Chairman.

SBL 7

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