Business Acumen

Question 1

Value

Answer 1

Refers to an orgz success in meeting its strategic goals

Question 2

Value Chain

Answer 2

Represents the process by which an orgz creates the product or service it offers to the customer

Question 3

Value Chain Members

Answer 3

R&D>Operations>Marketing/Sales>Fullfillment>Customer (Primary)

*Customer is the one that gives the Value

Mgmt/Finance/Legal/HR/IT/Supply Mgmt (Secondary)

Question 4

Orgz Life Cycles

Answer 4

1. Introduction: revenue is low, little market awareness, must create an identity with customers.
2. Growth: revenue begins grow, focus on creating processes.
3. Maturity: growth occurs only through intro of new products or customers, profit margins are narrow, efficiency is important, greater formalization.
4. Decline/Renewal/No Growth: demand will decrease, orgz can renew by changing their offering OR take no action.

Question 5

Porter’s 5 Forces

Answer 5

Used to identify opportunities and threats, forsee possible changes in the competitive landscape and plan strategy.

1. Bargaining power of suppliers
2. Bargaining power of buyers
3. Threat of entry
4. Threat of substitution
5. Competitive Rivalry

Question 6

Business Intelligence

Answer 6

The ability to use information to gain a deeper understanding of an orgz and its parts, to see how the whole orgz and its parts are performing and to make sound business decisions that are grounded in relevant and accurate facts rather than assumptions.

Three parts: Data Gathering, Data Warehousing, Query and Reporting Capabilities

Question 7

Data Gathering

Answer 7

Data is routinely gathered through different computer systems in all parts of the orgz.

Question 8

Data Warehousing

Answer 8

Data gathered from different systems is translated into a standard format, cleaned of errors and duplications, and then stored in databases related to specific uses.

*ERP (Enterprise Resource Planning): are able to integrate these distinct databases. Connects finance, HRIS, supply chain, customer relationship.

Question 9

OLAP (Online Analytical Processing)

Answer 9

Enhanced Business Analysis because of the way the data is stored, OLAP can analyze the data faster and in more ways than traditional relational databases.

Question 10

Incremental Budgeting

Answer 10

Traditional form of budgeting

The prior budget is the basis for the next budget, the prior budget is increased by a set %

Question 11

Zero-Based Budgeting

Answer 11

All objectives and operations are given a priority ranking

Each unit is ranked, and then available funds are given in order

Budget starts at zero and all expenses must be justified

Question 12

Activity-Based Budgeting

Answer 12

Recognizes the interrelationships among the various activities required to create value in an orgz

Funding may be allocated based on the strategic significance of the activities

Question 13

Formula-Based Budgeting

Answer 13

Different units or operations receive varying percentages of the budget.

Question 14

HR Budget

Answer 14

Talent Aquisitions, Training, Development, Compensations, Benefits, Employee & Labor Relations

Question 15

Business Case

Answer 15

A presentation to mgmt that establishes that a specific problem exists and argues that the proposed solution is the best way to solve the problem in terms of time, cost, and probability of success.

Statement of need>Recommend solution>Risks/Opp>Estimated Cost/Time frame

Question 16

Balance Sheet

Answer 16

A statement of the orgz financial position, its assets, liabilities, and equity–at a particular time.

The financial health of an orgz.

Assets=Liabilities+Equity

Question 17

Income Statement

Answer 17

Compares revenues, expenses, and profits over a specified period of time–usually a year or a quarter.

AKA P&L. P&L= the bottom line and provides key information about the orgz performance.

Net Income=Revenue-Expenses

Question 18

Gross Profit Margin & Net Proft Margin

Answer 18

GPM: net sales minus the cost of producing what is sold. Gross profit/net sales

NPM: what is available for reinvestment or distribution to owners/stakeholders. Net income/net sales

Question 19

Cash Flow Statement

Answer 19

Illustrates the effect of all orgz activities–activities that both consume value and produce value–on how much cash or cash equivalents the orgz has on hand.

Question 20

Financial Ratios

Answer 20

Important tool that can be used to analyze an orgz performance.

Current Ratio= current assets/current liabilities

Debt to Asset Ratio= total liabilities/total assets

ROI, EPS, Profit Margin, Debt to Equity Ratio

Question 21

What Does a Strategic Plan Start with?

Answer 21

A broad strategy–>that strategy trickles down to business units that work to help with the strategy.

*From Orgz>Business Unit>Operational

Question 22

Impact of Life Cycle on HR Strategy

Answer 22

Introduction: TA, create a culture, controlling risk associated with HR

Growth: Get the right talent, increase complexity of structure and policies, help leaders redefine their roles, formalize JDs, manage changes caused by growth

Maturity: Build and retain productive workforce, succession planning, reinforce policies and culture, consult other parts of the orgz to solve problems

Renewal: reduction in workforce, change in leadership

No Growth: maintain engaged workforce, increased TO, shrinking budgets

Decline: reduce workforce, manage stress, attract necessary talent

Question 23

Improving Environmental Awareness

Answer 23

Information gathering must be used regularly and expanded as new sources of information channels develop

*HR to expand their channels of information inside and outside of the orgz

Question 24

Query and Reporting Capabilities

Answer 24

Users can access the data they need and use stand alone ERP business application to sort, describe, and analyze data in many ways to create reports or charts

Question 25

The Budgeting Process Requires Understanding the Orgz Practices, Strategy, and Environment, What Questions Should You Ask?

Answer 25

How does the orgz allocate costs?

Which costs are variable and fixed?

When do costs occur?

What orgz strategic plans will affect HR?

What risk factors affect the budget?

Question 26

What Are Assets Liabilities and Equity

Answer 26

1. Assets: what an orgz owns (tangible and intangible accounts receivable)
2. Liabilities: what an orgz owes (accounts payable)
3. Equity:what a company owes to the owner or its shareholders–what is left over of a company assets after its liabilities have been discharged

Question 27

Non Financial Measures

Answer 27

Share of Market
Reputation
Level of brand awareness
EE retention and Job Satisfaction
EE engagement