BST - Performance management, risk and development Flashcards
How do you calculate ROI?
(Controllable profit/Divisional capital employed)*100
How do you calculate RI?
Controllable profit - (Divisional capital employed * % cost of capital)
What are the 4 most common transfer pricing options?
- Cost plus pricing
- Market price
- 2 part (variable cost plus lump sum)
- Dual pricing (A transfers at cost plus mark up and B transfers in at variable cost)
What are key indicators of good corporate governance?
- CEO is not the Chairperson
- Use of independent NEDs
- Committees for audit, remuneration and nomination
- Risk management
What are the following general principles that not for profit organisations should adopt?
- Accountability
- Consideration of stakeholders
- Openness and transparency
- Appropriate board structures
- Monitoring of performance
Risk management process?
- Appetite
- Identification (PESTEL, Five forces)
- Assessment (Likelihood, impact)
- Response
- Reporting
- Review and feedback
What are the 4 types of risk appetite profile?
- Reactors - no strategy
- Defenders - do not aggressively pursue markets
- Analysers - most firms
- Prospectors - most aggressive
What are the 4 risk responses?
- Transfer
- Accept
- Reduce
- Avoid
Advantages of acquisition rather than organic growth?
- Quicker
- Get around barriers to entry
- One less competitor
- Synergies (2+2=5)
Disadvantages of acquisition vs organic growth?
- Entry cost may be too high
- Clash of cultures
- Easier to control organic growth
- Reputation of target company?
Types of joint development strategy?
- JV
- Strategic alliance
- Licensing
- Franchising
What is the aim of Lynch’s expansion matrix?
Can be used to summarise combinations of expansion techniques based of internal and external development both at home and abroad
