A logical and research-biased approach to decision making
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Intuition
The ability to understand something without the need for conscious reasoning; similar to 'hunch'; a gut feeling held by a manager that is biased not on scientific decision making but on the personal views of the manager
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First mover advantages
Advantages that a business achieves by being the first to enter a new market. E.g developing customer loyalty and brand recognition before other competitors and gaining control of key resources that businesses entering the market are unable to get
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Opportunity cost
The 'real cost' of taking a particular action or the next best alternative foregone, e.g. the next best thing that you could have chosen but did not
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Decision tree
A tree-like model of the various options available in a decision, including the probability of different consequences and the financial outcomes of each option
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Expected value
The monetary value of an outcome of a decision; calculated by multiplying the expected monetary value of the outcome by the probability of that outcome occuring
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Net gain
The value to be gained from making a particular decision; calculated by adding together the expected value of each possible outcome of a decision and deducting the costs associated with the decision
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Ethics
The set of moral values held by an individual or group of organisations
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Stakeholders
An individual or group or other institution with a direct interest in the activities and performance of an organisation or in a project to be undertaken by that organisation
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Pressure groups
Organisations formed by people with a common interest or shared goal, who join together to further their interests or achieve their goals by putting pressure on the general public, governments or businesses. E.g. friends of the earth or greenpeace.
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Externalities
Costs and benefits that occur as a result of a firms activities, but which are not recorded in its accounts. E.g. pollution and congestion may be caused by a firms activities, but the costs are borne by the local community and not the by the firm
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Leadership
Deciding on the direction for a business or a department or functional area, setting objectives that reflect this,and inspiring and motivating staff to achieve these objectives
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Management
Getting things done by planning, organising, and co-ordinating people and resources.
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Participative management and leadership style
Involves consulting with subordinates and evaluating their opinions and suggestions before making a decision.
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Insolvency
When the liabilities of a business are greater than it's assets and it is unable to meet its financial obligations
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Liquidation
When a businesses assets are sold and the proceeds pay creditors. Any leftovers are distributed to shareholders.
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Bankruptcy
A situation when liabilities cannot be paid in full.
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Private equity firms
Made up of private investors who take over a company and work closely with the managers to turn the business around. Their aim is to make the it profitable and then sell it.
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IPO (initial public offering) AKA flotation
first sale of a company's shares to the public, leading to a stock market listing - When a company decides to list its shares on a stock market it is said to embark on a flotation
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Institutional investors
Pension funds, insurance companies, banks and other financial organisations that invest huge sums of money in the shares of public limited companies quoted on the stock exchange
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Social enterprise
A business that has objectives other than making profit. Part of a group of organisations in the "non-profit" sector
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Other cards in this set
Card 2
Front
The ability to understand something without the need for conscious reasoning; similar to 'hunch'; a gut feeling held by a manager that is biased not on scientific decision making but on the personal views of the manager
Back
Intuition
Card 3
Front
Advantages that a business achieves by being the first to enter a new market. E.g developing customer loyalty and brand recognition before other competitors and gaining control of key resources that businesses entering the market are unable to get
Back
Card 4
Front
The 'real cost' of taking a particular action or the next best alternative foregone, e.g. the next best thing that you could have chosen but did not
Back
Card 5
Front
A tree-like model of the various options available in a decision, including the probability of different consequences and the financial outcomes of each option
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