1.2 Different criteria used when making business decisions
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6 Terms
2 different types of criteria used when making business decisions
Internal and external
Different types of internal criteria when making business decisions
Attitude to risk, organisational objectives, core competencies of a business, impact on internal stakeholders, financial considerations and time.
Different types of external criteria when making business decisions
Level and nature of risk, impact on external stakeholders, degree of uncertainty, changes in the market, changes in external environment
Attitude to risk
Whether the business owners are willing to take high levels of risk to try to obtain high rewards, or whether they are risk averse and prefer a safer course of action. The decision made should fall within the business owners risk threshold.
Organisational objectives
What the business is trying to achieve. The decision made should move a business towards achieving its objectives, or at the very least not have a negative impact on business objectives.