BTF Flashcards
1
Q
What is the primary objective of a PLC?
A
Profit maximisation for shareholders
2
Q
What 8 areas did Peter Drucker point out that managers should be focussed on? (WMP PIMPS)
A
- Worker performance and attitude
- Market standing
- Productivity
- Profitability
- Innovation
- Manager performance and development
- Physical and financial resources
- Social responsibility
3
Q
What is a company’s ‘mission’ and what are the four elements?
A
A mission is the business’ basic function in society and is expressed in terms of how it satisfies its stakeholders. The four elements are:
Purpose
Strategy
Policies and standards of behaviour
Values
4
Q
Different types of goals and what they should be
A
Qualitative (aims) vs quantitative (objectives)
Should be SMART
5
Q
Three types of standards
A
Physical standards
Cost standards
Quality standards
6
Q
6 types of power according to French and Raven (followed by Charles Handy) (CRERNL)
A
Coercive power
Reward (or resource) power
Legitimate (or position) power
Expert power
Referent (or personal) power
Negative power (Handy)
7
Q
What cannot be delegated
A
Accountability (remains with manager)
8
Q
4 types of manager
A
Line manager
Staff manager
Functional manager (authority over other depts for your specific part)
Project manager
9
Q
3 key managerial roles as defined by Mintzberg
A
- Informational role
- Interpersonal role (such as representing your team)
- Decisional role (any kind of decision)
10
Q
Effectiveness of any manager will be influenced by what 3 things?
A
Authority
Autonomy
Leadership
11
Q
Taylor’s model of scientific management: 3 assumptions and 5 principles
A
3 basic assumptions:
- people are rational economic animals concerned with maximising economic gain
- people respond as individuals not groups
- people can be treated in a standardised fashion, like machines
Five principles:
1. Determine the one best way of doing a particular task
- Select the best person to do this task
- Train the worker to follow the set procedure
- Give financial incentives to ensure the work is done in the right way
- Give all responsibility to plan and organise work to the manager, not to the worker
12
Q
McGregor’s model: theory X and theory Y
A
Theory X:
Individuals dislike work so need coercion, control and punishment.
Theory Y:
Physical and mental effort is natural. Commitment is driven by rewards.
13
Q
Maslow’s conent theory: the hierarchy of needs (SSSSB)
A
TOP (last)
Self-actualisation
Status/ego
Social
Safety/security
Basic/physiological
BOTTOM (first)
14
Q
Tuckman’s four stages through which groups proceed
A
- Forming
- Storming
- Norming
- Performing
15
Q
The Harvard ‘Four C’s’ model of HRM
A
- Commitment
2, Competence
3, congruence
- Cost-effectiveness
16
Q
Four Ps for marketing mix
A
Product
Price
Promotion (SAPP)
Place
17
Q
4 elements of procurement mix
A
Quantity
Quality
Price
‘Lead time’
18
Q
Main 5 types of business structure
A
- Simple structure
- Machine bureaucracy/ functional structure
- Divisionalised
- Adhocracy/innovative
- Matrix structure
19
Q
Characteristics of bureaucracy (SHIP RUST)
A
Specialisation
Hierarchy of roles
Impersonal nature
Professional nature of employment
Rationality
Uniformity
Stability
Technical competence
20
Q
Herzberg’s 5 motivating factors
What are hygiene factors?
A
A sense of achievement
Advancement
Responsibility over subordinates
Recognition
Challenging work
Hygiene factors are concerned with the context of the job rather than its content. If absent they will demotivate.
21
Q
Mintzberg’s 5 Ps of strategy
A
Plan
Ploy
Pattern
Position
Perspective
22
Q
Four key stages of the rational planning model (SSSR)
A
Strategic analysis
Strategic choice
Strategy implementation
Review and control
23
Q
5 steps of the emergent approach business strategy
A
- External analysis (of the environment)
- Internal analysis (of the business)
- Corporate appraisal
- Mission, goals and objectives
- Gap analysis
24
Q
3 stages of Strategic choice
A
- Strategic options generation
- Strategic options evaluation
- Strategy selection
25
How to evaluate environmental uncertainty in business strategy
Four S's to describe a static environment
Four D's to describe a dynamic environment
26
Four S's to describe a static environment
Static
Single
simple
Safe
27
Four D's to describe a dynamic environment
Dynamic
Diverse
Difficult
Dangerous
28
Analysing the general environment (PESTEL)
Political factors
Economic factors
Social/demographic factors
Technological factors
Environment/ecological factors
Legal factors
29
Porter's five forces for analysing the competitive (task) environment
Industry competitors
Potential entrants
Customers
Substitutes
Suppliers
30
Kotler's four kinds of competitors
Brand competitors - similar firms with similar products
Industry competitors - similar products but differences eg geography
Generic competitors - competing for the same disposable income
Form competitors - different products satisfying the same need
31
Kotler's four response profiles to competitors
Laid back
Tiger
Selective
Stochastic
32
BCG matrix for planning products and markets (key)
Market share / market growth
High / high: stars - build
Low / high: question marks - harvest or build
Low / high: cash cows - hold or harvest
Low / low: Dogs - divest or hold
33
SWOT analysis
From internal analysis: internal appraisal of the businesses' STRENGHTS and WEAKNESSES
From external analysis: external appraisal of the OPPORTUNITIES and THREATS faced
34
Mendelow's mapping stakeholders
Level of interest vs Power held
A: Low/low - minimal effort
B: high/low - keep informed
C: low / high - keep satisfied
D: high/high - key players
35
Porter's three generic competitive strategies
Cost leadership
Differentiation
Focus (cost focus or differentiation focus)
36
Ansoff's matrix for product/ market strategies
Product vs market
Existing/existing: market penetration
New/existing: product development
Existing/new: market development
New/new: diversification
37
4 elements matrix of risk response and control
Impact vs probability
Low/low: Acceptance
High/low: Sharing
High/low: Reduction
High/high: Avoidance
38
A long-term disaster recovery plan will typically provide what three things?
Standby procedures
recovery procedures
Personnel management
39
Three basic legal forms of business
Sole trader
Partnership
Company
40
Qualities of good financial information (ACCURATE)
Accurate
Complete
Cost-beneficial
User-targeted
Relevant
Authoritative
Timely
Easy to use
41
4 Characteristics of big data (4 Vs)
Volume
Velocity
Variety
Veracity
42
Information processing: criteria for effectiveness (CATIVA)
Completeness
Accuracy
Timeliness
Inalterability
Verifiability
Assessibility
43
Qualities of a secure information system: ACIANA
Availability
Confidentiality
Integrity
Authenticity
Non-repudiation
Authorisation
44
The four tasks of the finance function
Recording financial transactions
Management accounting
Financial reporting
Treasury management
45
Triple bottom line is used to measure which three areas (SEE)
Social
Environmental
Economic
46
The Task Force on Climate-related Financial Disclosures (TFCD) recommends what 4 areas of disclosure? (GSRM) think broad business
Governance
Strategy
Risk management
Metrics and targets
47
3 Es used to measure resource use in NFPs
Effectiveness
Economy
Efficiency
48
4 perspectives (focusses) of the balanced scorecard for measuring strategic objectives (CIIF)
1. Customer
2. Internal business processes
3. Innovation and learning
4. Financial
49
5 types of bank clearing system
1. General clearing - 3-4 days
2. Electronic Funds Transfer (EFT)
3. Banks Automated Clearing System (BACS) - same day
4. Clearing House Automated Payment System (CHAPS) (items >10k) - same day
5. Society for Worldwide Interbank Financial Telecommunication (SWIFT)
50
4 parts of professional accountants' role of maintaining and safeguarding assets
1. Recording of transactions
2. Business' internal controls are sufficient
3. Audit committee is properly constituted and has the information and resource that it needs to fulfil its objectives
4. The business has non-executive directors who are adequately qualified and resourced do that they can fulfil their role
51
4 reserved areas of practice
1. Statutory audit
2. Investment business
3. Insolvency
4. Probate
52
Regulation of professions should NOT (4)
1. Protect vested interests from competition
2. Be for personal gain or to satisfy prudent interest
3. Be disproportionate to the benefit gained
4. Distort competition
53
Three main roles of the Professional Oversight team, a part of the FRC
1. Independent oversight
2. Statutory oversight of the supervision of the auditing profession
3. Statutory monitoring of the quality of the auditing
54
3 steps of the complaints and disciplinary procedure of the ICAEW
1. Independent oversight
2. Statutory oversight of the supervision of the auditing profession
3. Statutory monitoring of the quality of the auditing
55
4 broad perspectives on what the objectives of corporate governance should be
1. Corporate: to maximise wealth of shareholders
2. Public policy: objectives of shareholders plus interests of stakeholders plus publics' interests
3. Stakeholder: efficient use of resources, accountability to shareholders, align interests of shareholders and stakeholders
4. Stewardship: act in the best interests of the company
56
5 key elements which support the drive toward good corporate governance
1. The board of directors - executive, non-executive and committees of the board of directors as a whole
2. Senior management - be of high quality and be able to: enact the boards' decisions and whistle-blow
3. Shareholders being proactive
4. External auditors, working for shareholders independently
5. Internal auditors, independent of directors
57
5 main principles for companies according to the Corpoate Governance Code 2018 (BLAIR)
1. Board effectiveness
2. Leadership
3. Accountability/Audit
4. Investor relationships
5. Remuneration
58
2 alternative structures for the board of directors
1. A unitary board, responsible for both management and reporting to the shareholders
2. Dual or supervisory board, split between management board and supervisory board
59
The Governance Code requires that directors confirm in the annual report what 3 things?
1. They have carried out a robust assessment of the principal risks and how to deal
2. How they have assessed future prospects
3. Whether they have a reasonable expectation the company will continue to operate and meet liabilities
60
5 components of effective internal control according to COSO (CRCIM)
1. Control environment
2. Risk assessment
3. Control activities
4. Information and communication
5. Monitoring activities
61
7 principles of the stewardship code
1. Publicly disclose policy on how they will discharge stewardship responsibilities
2. Have a robust policy on managing conflicts of interest in relation to stewardship, and this policy should be publicly disclosed
3. Monitor their investee companies
4. Establish clear guidelines on when and how they will escalate their activities as a method of protecting and enhancing shareholder value
5. Be willing to act collectively with other investors where appropriate
6. Have a clear policy on voting and disclosure of voting activity
7. Report periodically on their stewardship and voting activities
62
As well as giving opinion on financial performance, external auditors of listed companies also have to report on the (2)
Directors remuneration report
Company's compliance with the UK Corporate Governance Code
63
5 Nolan Principles useful starting point for ethical business value
1. Integrity
2. Objectivity
3. Accountability
4. Openness
5. Honesty
64
5 business values according to the Institute of Business Ethics (FaRTTT)
1. Fairness
2. Responsibility
3. Trust
4. Transparency
5. Truth
65
5 attributes and behaviour of ethical leaders (CHOAF)
1. Openness
2. Courage
3. Fair mindedness
4. Ability to listen
5. Honesty
66
2 key sustainability goals from the UN Global Impact
Provide decent work and economic growth
Industry, innovation and infrastructure
67
What is a Giffen good and what is it's PED
A basic good, increase in demand as their prince increases
68
What is a Veblen good and what is it's PED
Designer goods and stuff that's more attractive when more expensive
69
4 basic factors of production
Land
Labour
Capital
Entrepreneurship
70
6 factors effecting consumer consumption
1. Disposable income and MPC
2. Distribution of wealth
3. Government policy
4. New products
5. Interest rates
6. Price expectations
71
Two main causes of demand pull inflation
1. Fiscal - caused by government action
| 2. Credit - levels of credit extended to consumers increased
72
SMART target parts (careful)
Specific, measurable, achievable, relevant, time bound
73
What is transferred in delagtion
Responsibility and authority (can be some power)
74
Quinn's types of business culture
Flexible/ inward looking = human relations culture
Flexible / outward looking - open systems culture
Control / inward looking = internal process culture
Control / outward looking - rational goal culture
75
Push vs pull promotion
Push promotion uses intermediary channel members to push the product through the distribution channels to the ultimate consumer via promotions and personal selling efforts. Pull promotion is addressed to to consumers to encourage them to demand the goods
76
Mintzbergs 6 building blocks of an organisation
Strategic apex
Middle line
Operating core
Technostructure
Support staff
Ideology
77
Mechanistic vs organic businesses, (Burns and Stalker)
Mechanistic - stable, efficient and suited for slow-moving environments
Organic - flexible adaptive and dynamic
78
Johnson and Scholes tests for strategies
Acceptability
Suitability
feasibility
79
4 stages of product life cycle
Introduction, growth, maturity, decline
80
Primary vs support activities
Primary activities are directly related to production, operations, sales, marketing, delivery and service
81
Business plan vs strategic plan vs operation plan
A business plan sets out the markets to be served, how they will be served and the finance required. A stratefic plan sets out the business overall objectives and how to achieve them. An operation plan specifies what is epected of each function in a business.
82
What is gross risk
Gross risk is a function of the loss or impact and its probability, before any control measures are implemented
83
Sequence of responding to risk
Sequence of responding to risk: avoidance, reduction, sharing (or transfer), acceptance
84
Risk classifications
Business risk
VS
Non-business risk:
financial and operational risk
85
4 features of resilient organisations
Diversified resources and assets to adapt to change
Strong relationships and networks
Ability to respond to crises
Ability to review and adapt on experience
86
SD vs variance vs coefficient of variation (key)
SD - average distance from the mean
Variance - SD squared
Coefficient of variation - SD / mean
87
What is a critical success factor (CSF)
Product features that are particularly valued by a group of customers and therefore the organisation must excel in to outperform the competition
88
3 parts of global reporting initiative
Economic, environmental, social
89
Four types of finance
The four types of finance: immediate to pay wages and day to day expenses,
short to pay for goods/services bought on credit
, medium to pay for inventory and receivables as business grows and to pay tax;
long to pay for non-current assets
90
Money market vs capital market
Money market - general name for all markets where securities etc are traded
Capital market - source of finance for businesses and exit route for investors
91
What are the Wates principles - a voluntary code for large private companies (BDROPS)
Board composition
Director responsibilities
Remuneration
Opportunity and risk
Purpose and leadership
Stakeholder relationships and engagement
92
3 basic elements of a financial system (there may be others)
intermediaries, securities and markets
93
The core aspects of the South Africa King report (GLS)
Good corporate citizenship
Leadership
Sustainability
94
What is the requirement for non-executive directors to be independent
They can have worked for the company as long as it finished 5 years ago
95
How many directors are required in the audit committee (independent and non-executive)
3 for normal, 2 for small
There must be one who has relevant and recent financial experience
THE ONLY type of directors permitted are independent NE directors
96
Share of non-executive independent directors that need to be on a board
if on FTSE 350: at least 50% must be NE independent directors
If not: minimum is two
97
Who appoints the directors
Appointed by the board and elected by the shareholders at the next AGM and face re-election every year
98
What XED do complementary products have
negative
99
When is QE used
When interest rates are low and liquidity is low
100
4 ways businesses respond to regulation
Non-response
Mere compliance
Full compliance
Innovation
101
Punishment for collusion
Up to 10% worldwide revenue fine
102
Purpose of anti-monopoly legislation vs market regulation
Anti-monopoly llegislation promotes competition(looking forward), market regulation compensated for a lack thereof
103
What is exploratory data analysis
Data that aims to identify relationships between different variables
104
5 Cyber essentials list from the UK government
Malware protection
Secure configuration
access controls
Internet gateways
Patch management software
105
4 types of orientation
Marketing orientation (customer needs focus)
Sales orientation (sell)
Production orientation (make as much as possible)
Product orientation (falls in love with the product)
106
Scale of risk for a business depends on four key concepts
Exposure
Volatility
Impact
Probability
(gross risk = probability x impact)
107
What is the liability of a limited company
The shareholders have limited liability but hte company has unlimited liability for its own unpaid debts
108
What's the name of big data supplied by a third party company
Compiled big data
109
What 3 things are covered by the complaints and disciplinary procedure of the ICAEW professional standards department
Breach of regulation
Departure from guidance
Bringing ICAEW into disrepute
110
What two things does faithful representation require?
Accurate and complete
111
According to principles of corporate governance, companies must protect and facilitate which two of the following shareholder rights?
The right to have secure methods of ownership registration.
| The right to elect and remove members of the board.
112
In a dual board structure, the supervisory board is elected by who?
Shareholders and employees
113
The non-executive directors in a plc have a prime role in
determining appropriate levels of remuneration for executive directors
114
Can a person be a chairman and director at the same time
No they should not
115
If there are a few companies, what type of market is it?
Oligopoly
| monopolistic competition has many
116
The Competition Commission/Competition and Markets Authority only has authority to look at which 2 issues?
Competition and regulation
117
Requirements of a plc nomination committee
Membership of a plc nomination committee must consist of OVER 50% independent NE directors
118
Can a person be a chairman of more than once company at the same time?
They can if they show they have the available time
119
When is a director appointed, elected
Appointed by the board
Elected by shareholders at the next AGM
Re-elected every year
120
What is an expansion of demand/supply
A movement along the curve
121
PED formula
(Change in QD/original QD) / (change in P/original P)
122
Key chapters of the Competition Agreement 1998
Chapter 1: Anti-competitive agreements
Chapter 2: Abuse of a dominant position
123
What tools are used in monetary policy
Exchange rates and interest rates
124
What is the name of the UK government body responsible for promoting effective
competition and conducting inquiries into markets and industries?
Competition & Markets Authority
125
What is covered by the Code of Market Conduct?
Insider dealing
126
In order to obtain a full listing on the London Stock Exchange the company must have
traded for a minimum of
3 years
127
What is the ICAEW complaints and disciplinary procedure (3)
Conciliation
Investigation by the IC
Disciplinary proceedings by the DC:
1. consider complaint, ask questions
2. gather evidence
3. decide what to do next
4. reached a decision and disciplines if appropriate
128
The accounting principle that states a company should recognise losses as soon as they are
known is:
The prudence principle states a company should use only recognise profits once they are certain but
should recognise losses as soon as they are known.
129
What is the definition of integrity?
Holders of public office should not place themselves under any financial or other obligation to outside individuals or organisations that might influence them in the performance of their official duties.
130
The Financial Reporting Council’s UK Corporate Governance Code forms part of the
UK Listing Authority’s rules
131
The major purpose of the International Accounting Standards Board (IASB) is to ensure consistency
in?
Corporate reporting
132
In a limited company, is there perpetual succession? Are they private?
In a limited company, there is perpetual succession. Financial statements cannot remain private, they must be filed
133
Which of the following has a separate legal identity?
Strategic alliance or registered company
A strategic alliance does not have its own identity. A registered company is a separate legal identity.
134
What type of analysis is analysis of distinctive competencies?
Internal analysis
135
Define risk exposure
Risk exposure is simply the measure of the way a business is faced by risks
136
What does increased automation due to a company's financial risk?
Increased automation increases the company's financial risk as they increase fixed overheads and thus liquidity risk
137
What type of risk is failure of a supplier?
Event risk so operational risk so non-business risk
138
What type of reporting is financial reporting?
Financial reporting is external reporting as it is intended for an external audience
139
Define economy as an objective
Economy is the success of the team or work group in controlling its costs
140
Which section looks after foreign exchange management?
Foreign exchange management is part of the treasury management section
141
What is the purpose of tactical information?
Tactical information help staff deal with short-term issues and opportunities
142
What assertions (type thing) does range checks help with
Range helps with accuracy but not completeness
143
What type of offering cannot be used to obtain a new stock exchange listing?
A rights issue cannot be used to obtain a new stock exchange listing.
144
Define a letter of credit
A letter of credit is a document issued by a bank on behalf of a customer, authorising a person to draw money to a specified amount from its branches of correspondents, usually in another country, when the conditions set out in the document have been met
145
Where can a bond issued a year ago be sold?
A bond that was issued in the last year can be sold in a capital market and a secondary market
146
What makes a defensive approach
If the company is not relying on current liabilities to finance current assets, this is a defensive approach
147
Define accountancy profession
The definition of the accountancy profession is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and other decision markers make resource allocation decisions
148
Who appoints the external auditors
The shareholders
149
Can a person hold both chief executive and chairman?
The job of chief exec and chair should not be held concurrently and the chief exec should not go on to chair.
150
Can anti-monopoly enforcement aid innovation
Anti-monopoly enforcement is a deterrence, it has little innovation effect
