Higher January Prelim Revision

Outline a benefit of becoming a multinational

• Wages and raw materials costs are lower in host countries

• Language barriers can slow down communication

• Cultural differences can affect production e.g. siesta's in Spain

Outline a disadvantage of becoming a multinational

• Wages and raw materials costs are lower in host countries

• Language barriers can slow down communication

• Business can avoid legislation in the home country

Outline an objective of an organisation in the third sector

• Providing a quality good or service

• Maximising profit

• Increasing market share

Outline a conflict of interest between two groups of stakeholders

• Owners need suppliers to provide raw materials and suppliers need owners to continue to buy from them

• Employees want a pay rise whereas owners want to maximise profit

• Owners need customers to buy their products, while customers need owners to provide a good quality product/service

Outline the impacts of an external factor

• The government may increase National Minimum Wage which will increase wage costs for the organisation

• The economy may be in a recession which means customers have less disposable income and sales may decrease

• Businesses are increasingly encouraging employees to work from home which means employee motivation may increase as they have a better work-life balance

• If an organisation is providing free Wi-Fi then this is likely to attract customers who need to use it

Describe a centralised structure

• This is where decision-making and control is kept at the very top of the organisation.

• Decision-making and control is delegated to individual branches or departments in these organisations

Describe a decentralised structure

• This is where decision-making and control is kept at the very top of the organisation.

• Decision-making and control is delegated to individual branches or departments in these organisations

Outline a benefit of a centralised structure

• The business can respond quickly to changing external factors

• A high degree of corporate identity exists as decisions are made for the whole organisations

• More subordinates are empowered which encourages creativity

Outline a benefit of a decentralised structure

• Procedures are standardised which ensures consistency

• A high degree of corporate identity exists as decisions are made for the whole organisations

• More subordinates are empowered which encourages creativity

Outline a disadvantage of centralised structure

• The organisation can lose an overall corporate image if each department/branch is operating differently

• Decisions do not reflect the needs of local markets

• Additional training required for middle management