Business and Finance Deck Flashcards
An organisation is…
A social arrangement for the controlled performance of collective goals which has a boundary separating it from its environment.
A business is …
An organisation that is oriented towards making a profit. It is an entity separate from its owners.
Sustainability is…
The ability to meet the needs of the present without compromising ability of future generations to meet needs, (Not just environmental).
A stakeholder is…
someone who has an interest to protect in terms of what the organisation does. All people/ things affected.
Business sustainability is…
How far a business can operate in a sustainable way, how it should interact with individuals and governments in doing so.
Corporate sustainability is…
Actions, activities and obligations of business in achieving sustainability.
Satisficing is…
Creating a satisfactory profit for business.
A mission is…
The business’ basic function in society. It contains the purpose, strategy, policies and values of the organisation.
SMART stands for…
Specific, measurable, achievable, relevant, time-bound.
Common primary objectives of a business are to…
maximise profit, or revenue (different).
Management is …
getting things done through other people.
Power is …
the ability to get things done!
Coercive power is …
the power of physical force/ punishment/ intimidation.
What are the 6 types of power?
Coercive, Reward/ Resource, Legitimate / position, expert, referent /personal, negative.
What is reward/resource power?
Power over resources you have.
What is legitimate power?
Power due to authority and position you have in a business.
What is expert power?
Power from experience/ qualifications.
What is Referent / personal power?
Power based on personality / charisma.
What is negative power?
The power to disrupt operations. (Industrial action, sabotage, refusal to communicate).
Authority is…
The right to do something, or ask someone to do something and for it to be done.
A functional manager…
has authority to direct, design, control activities in another department. Hybrid of Line manager and Staff manager.
What are the three roles of a manager?
Interpersonal (leader for team, linking managers), Informational (relaying and checking data), decisional role (allocate, handle, negotiate, solve).
Culture is …
The common assumptions, values and beliefs that people share.
What is internal process culture?
Business looks inward, controlled internal environment, goals known and unchanging, defined procedures. Security and order is staff motivator.
What is Rational goal culture?
Goals relate to external requirements. Competition motivates staff.
What is systems culture?
External environment is ever-changing, business must be flexible, staff motivate by growth, creativity and variety.
What is human relations culture?
Business looks inwards, aims to maintain existence and staff wellbeing. Staff motivated by sense of belonging.
What is a model?
Representations of complex realities which can be analysed and passed down.
What are Taylors five principles of scientific management?
Find best way to do task, find best person to do it, train the person, give financial incentives to ensure it is done right, give responsibility to plan and organise to manager.
What is marketing?
Human activities directed at facilitating and consummating exchanges. or. The process which identifies, anticipates, supplies customer requirements efficiently and profitably.
FMCGs are…
Fast moving consumer goods, cheap, high volume, bread etc.
Consumer goods are…
Low volume, high value. White goods (fridges) brown goods (cd players, card) soft goods (clothes, linen) services.
Marketing mix is…
The set of variables a firm used to produce the desired market response.
Marketing mix consists of (p)…
(Quality of) product, price, promotion (method and) place, people, processes, physical evidence. (Last 3 for services)
Market segmentation is…
Splitting market into groups that would be targeted differently.
Types of business orientation (focus) include…
Sales, production, product, marketing.
The three main elements of a product…
Basic product (a car), actual product (Ford Focus), augmented product (with guarantee, 0% interest etc.)
Things to consider when taking a product from basic to augmented are…
Quality, packaging, branding, aesthetics, product mix, servicing.
The five main promotion techniques are…
Advertising, sales promotion, public relations, direct marketing, personal selling.
What are the two main elements in promotion…
Push (ensuring products are available to consumers), pull (persuading ultimate customers to buy)
The four v’s of operation management.
Volume, variety, variation, visibility.
Pure research is…
Research for new knowledge, no obvious commercial or practical end.
Applied research is…
Research with practical end in view.
Procurement is…
Acquisition of goods at best possible total cost of ownership for business.
Lead time is…
Time between placing and delivery of order.
The hard and soft approach to human resources management.
Hard relates to resources, soft relates to humans and their soft skills and wellbeing.
Success of human management in four c’s…
Commitment, competence, congruence, cost-effectiveness.
Taylor’s Model of scientific management made three assumptions of human behaviour:
People are rational economic animals, People can respond as individuals, People can be treated in a standardised fashion.
The conclusions to Taylor’s model are:
Main motivator: high wages, Manager’s job: tell workers what to do, Workers’ jobs: do what they are told and get paid.
McGregor’s Theory X:
Individuals dislike work, lack ambition, prefer to be led, coercion control and punishment needed, desires security and remuneration!!
McGregor’s Theory Y:
Physical and mental effort is natural, commitment is driven by rewards, self control and direction is important, people learn to like responsability, intelectual power can be developed.
Motivated workers will work:
80-90% of capacity, unmotivated is 30%.
Maslows pyramid of needs orders them (top to bottom) - (people work their way up):
Self actualisation needs, status/ego, social, safety, basic.
Hezberg believed organisations need to deal with hygene factors and motivating factors…
Hygene factors stop dissatisfaction, motivaiton stops demotivation.
Hezbergs hygene factors concern:
Company policy, supervision, salary, relationships, conditions.
Hezbergs motivation factors concern:
Achievement, recognition, challenge, responsability, advancement.
Belbin thought there were eight key team roles people fell into:
The leader, the shaper, the plant (thought-provoking), the evaluator (critical), resource-investigator, the company worker (turns ideas into specifics), team worker (relaitonships), the finisher (progress chaser).
Belbin’s team has:
One leader and/or shaper, Equal numbers of plant/evaluators, equal numbers of team and company workers, minimal finishers.
The effectiveness of a manager is influenced by:
Authority (rights to control), autonomy (give people freedom), leadership (power in the right way to give positive response).
Likert said there were four basic leadership styles…
Exploitative authoritative, benevolent authoritative, consultative, participative.
Blake and Mouton created a managerial grid, in the grid managers are ranked on…
their cocncern for people, concern to get the task done.
If Cedric designed an IT system and Kara tried to edit the system. The authority Cedric can impose is…
Functional authority.
Which two of: Inward looking, flexibility, environment control, outward looking are typical of rational goal culture?
Controlling and outward looking.
The main concern for FMCG (fast moving consumer goods) otu of customers, costs, corporate objectives, competitors is…
Competitiors. FMCG are competitive.
If four people offer a service to a manager and 1 person offers the same service for same price, the management decisions is about… (out of Marketing, Operations, Finance, HR).
operations management (procurement).
In terms of the operational iceberg, which of these is a covert variable affecting organisational behaviour? Political behaviour, Organisaitonal design, Organisational goals, Regulations?
Political behaviour.
The model of behaviour that suggests humans want security above all else is…
Theory X
What are Mintzbergs six building blocks of a business?
Operating core (operating staff), middle line (middle managers), strategic apex (top managers). Then around outside, support staff (e.g. Catering), techno structure (analysts standardising), and around all, ideology.
Coordination mechanisms integrate the following 5 building blocks into a cohesive unit…
Direct supervision, standardisation of work, skills and outputs, mutual adjustments
What are Henri Fayols 14 guiding principles of business and hierarchy?
Work division, scalar chain, correspondence of authority and responsibility, centralisation of decision making, unity of command (receiving orders from one person only), unity if direction (one lead/plan for each activity), initiative, subordination of individual interests, discipline, order, stability of personnel, equity, remuneration, esprit de corps.
Modern management theorists emphasise values of… (Rather than unity)
Multi-skilling and flexibility of units, structure and deployment of labour to respond to varying needs.
The three main ways of communicating the structure of a business are…
Organisation chart, organisation manual, Job description.
Mintzbergs building blocks are generally combined to make five different kinds of organisational structure… (Studied more later)
Simple (entrepreneurial), machine beurocracy (functional), professional beurocracy, divisionalised (by product/geography), adhoc/ innovative (matrix).
Details of the simple/entrepreneur structure…
Strategic apex core, flexible, quick decision making, restricted in size, lack of career structure, retention of power at top, cannot adapt to unusual new ideas.
Details of the functional / bureaucratic structure are…
Technostructure is the key element. Clear lines of authority, jobs grouped by common feature, stable environment, small enterprise, good career opportunities, easy to move up ranks, efficient as functional tasks well known, structure is very rigid and growth is tricky. Slow decisions.
Divisionalisation is…
Division of a business into autonomous regions each with separate revenues, expenditures, asset purchase programs.
Details of the divisional structure …
Middle line is the core building block, business split into divisions, sometimes subsidiary’s, reporting to group board of directors, each division must have delegated authority - potential for growth - large enough to support needs - challenge, flexible, develops managers, fewer levels, efficient, good management decisions, can cause squabbles with central, interdivisional trading problems.
Details of the matrix structure are…
Key building block is the operating core, vertical and lateral lines of communication eg education establishments, may be temporary, dynamic, reflects importance of project to customer, conflicting demands of staff time and resource allocation, dilution of authority.
Centralisation is when…
Decision making authority is concentrated in strategic apex. Offers control, decentralisation offers flexibility.
A decentralised structure is when…
Authority to make decisions is passed to lower levels of hierachy.
Fators that affect the amount of centralisation are…
Leadership style, organisaitonal size, diversification, communication, ability of management, speed of technological advancement, extent of local knowledge needed.
A span of control is…
How many people are reporting directly to one person.
Urwich held in his comments on the span of control of individuals that…
there needs to be a tight (restricted) span of control. Not too big or too small, limited by manager capabilities, geographical dispersion, nature of problems, support from other departments.
A scalar chain is…
the chain of command from most senior to most junior.
A tall/flat business is…
Think of the triangle of hierachy and the spans of control. How many people does each manager have supervision over?
What are some advantages / disadvantages of tall / flat businesses?
Number of steps on promotion, number of hands work gets passed through, speed of decision making, group size and team participation, opportunities for delegation, how much of an idea managers have of goings on, level of control, cost.
What are mechanistic and organic businesses?
Mechanistic are stable, efficient, for slow-changing environments. Organic are flexible, adaptive, suitable for fast-changing environments people follow business mission rather than just loyalty.
A bureaucracy is …
A continuous organisation of official functions bound by rules.
A continous organisation…
Doesn’t disappear when people leave.
Official funcitons are …
How the business is divided into areas with specified duties, authority given to managers in charge.
The characteristics of a bureaucracy are:
Hierachy of roles, specialisation and training, professionality of employment, impersonal nature, rationality, uniformity of task procedures, technical competance, stability.
Advantages and disadvantages of a bureaucracy are…
Good for routine tasks, efficient, rigid procedures, slow decision making, conformity, less innovation, slow to change, restricted communication.
In a general partnership…
The partnership has no seperate legal identity, all partners share debts if one becomes insolvent,
In a limited partnership…
The partnership has no seperate legal identity but one or more partners may have limited liability provided there is one fully liable partner. Limited partners cannot remove capital or be part of management.
In limited liability partnerships…
Not too far from Ltd. companies, there is a seperate legal entity, some funding restrictions between general and limited partnerships are relaxed.
The difference between a public company and a private company is…
A public company issues shares and securities and is registered under the Companies act. A private company is not.
Some advantages / disadvantages of companies and partnerships (audit, records, publicity)…
Partnerships don’t have to go through audit, don’t have to keep accounting records in any particular format, own assets, don’t have to make public any information, don’t have perpetual succession (transferal of ownership - shares), don’t have to send financial statements to Registrar (unless limited liability), can’t offer floating charges.
A licensing agreement is…
permission for another company to manufacture or sell a product / use a brand name.
A joint venture is…
When a separate business is formed to take a financial stake, management provided.
Strategic alliance is…
Eg airlines having alliances to cross book passengers.
Som advantages / disadvantages of group structures are… (e.g. parents and subsidiarys)
Fundas and people can be moved easily for tax losses. Failure risk spread, financial reporting is more complex, lots of admin for annual returns, failure of a group company is bad for whole group.
Which 3 of Scalar chain, Matrix structure, flexibility, unity of direction, division of work are classical principles of organisational structure according to Fayol?
Scalare chain, Unity of direciton, Division of work.
A bureaucracy is suited to a situation where the business environment is…
Static and simple.
Which out of a general partnership, limited company, limited liability partnership has limited liability for its debt.
None of them.
A franchise is a form of… (joint venture, licensing agreement, strategic alliance, agency)
Licensing agreement.
A business strategy is concerned with…
Long-term direction, environment, resources, return.
What are Mintzbergs 5 P’s of strategy?
A strategic Plan, Ploy (to gain victory), Pattern (from culture of management), Position (in the market), Perspective (how does business see the world?).
Strategy can be divided into 3 levels…
Corporate (overall missions, investments, decisions), Business (with SBU’s), Functional (How the main functions in each SBU are delivered effectively).
An SBU is…
A strategic business unit. A section within a larger business which is responsible for planning, developping, producing and marketing its own produts or services.
Strategic management involves…
Taking decisions about scope of activities, long term direction of business, allocation of resources.
Formal strategic planning has four stages…
Strategic analysis, strategic choice, implementation of strategies, review and control. It is statement of long term goals with definition of strategies and policies which ensure achievement.
Strategic planning has been criticised because…
Human activities are not as rational and logical as expected. Short term environment changes necessitate changes.
The emergent approach to strategy planning addresses problems by…
accepting the final goal is unclear, adapting to human needs, evolving continuously and incrementally. The choice and implementation stage ar ecombined.
A positioning-based view of strategy planning is…
that forces at work in industry, sector or market are the most important factors. Identifying opportunities in environment.
A resource based view of strategy is…
Strategic capabilities are most important, they explain the differences between the businesses and the superior performance over some others. Strategies developped on.
In a positioning based view the planning process is…
External and internal analysis, corporate appraisal, decide on goals and objectices, analysing the gap, finding strategic choice, strategic option evaluation, strategic selection.
The three kinds of strategies a business should have are…
Competitive strategies, Product - market strategies (where it competes and direction), institutional strategies (method of growth).
The “General environment” is…
all political, legal, economic, social/cultural, ecological technological (PESTEL) influences in the country around the business.
The “Task environment” is the…
factors of relevance to a business such as competitors, customers, suppliers. (Think of the environments as bubbles around the business that items pass through).
A static environment can be described by four Ss…
Static in terms of environmental change, Single product/market, Simple technology, safe.
The four D’s can describe a dynamic business environment…
Dynamic in terms of speed of change, Diverse in product and market, Difficulty, Dangerous (in terms of ignoring the environment).
PESTEL stands for…
Political, Economic, Social/demographic, Technological, Ecological, Legal factors.
Porter states that there are five competitive forces that influence the state of competition in an industry as a whole…
New entrants, customers, substitutes, suppliers, industry competitors.
Some threats to new entrants into a market include…
Scale of operations, Static markets (competition), Product differentiation of competitiors, investment requirements, access to distribution, cost advantages to existing companies.
Entry barriers in a market may be lowered by…
Changes in environment, technological changes, novel disribution channels.
Bargaining ability of customers depends on…
How much they will buy, How critical their product is, How they can pass on costs, if the items are specialised, their profitability, ability to bypass supplier, skills of purchasing staff, quality importance.
The bargaining power of suppliers depends on…
Other suppliers, threat of new entrants, other customers of suppliers, importance of product, specialised product, switching costs.
Brand competitors are…
Compteitors that offer similar things, burger king and mcdonalds.
Industry competitors are…
Offering similar products but are different in other ways, like tesco and amazon.
Generic competitors are…
competing for the same disposable income… e.g. CD shop and book shop.
Form competitors are…
Offering distinct products that satisfy same needs (lighters and matches).
Kohler identifies 4 types of reaction to competitor profiles…
Laid back , Tiger, Selective, Stochastic (unpredictable).
A position audit…
examines the current state of the entity in respect of resources, competencies, products, systems, organisation, results, returns.
The M’s that should be reviewd in a resource audit are…
Machinery, Make-up, Management, Management information, Markets, Materials, Men and Women, Methods, Money.
A limiting factor or key factor is like…
shortage of supply…
The support activities of a value chain include…
Firm infrastructure, Human resource management, Technology department, Procurement…
The Primary activities of a value chain are…
Inbound logistics, Operations, Outbound logistics, Marketing and Sales, Service.
The vaue chain is…
The sequence of business activities by which in the perspective of the end user, value is added to products.
Integrated supply chain management is…
Optimising the activities of businesses working together to produce goods and services.
Integrated supply chain management can include…
Reduction in suppliers, reduction in customers for focus, linked computer systems, carefully designed distribution, joint problem solving.
Product form is…
The specific type of product… Five door hatchback or two seater sportscar.
The product life cycle consists of …
Introduction, growth, maturity, decline.
The BCG (boston consulting group) matrix categorises products based on…
Market growth, market share. INTERNAL ANALYSIS
Market share is assessed as a …
ratio, so higher than 1 indicates that it is market leader.
In the BCG matrix, High market share and high Market growth means…
Stars. => Build
In the BCG matrix, Low market share and high Market growth means…
Question marks => Build or Harvest
In the BCG matrix, High market share and low Market growth means…
Cash cows => Hold or Harvest
In the BCG matrix, Low market share and Low Market growth means…
Dogs => Hold or Divest
In the BCG matrix, stars…
Require capital expenditure to maintain market position, forgo short term earnings to build market share for promising returns.
In the BCG matrix, Cash cows (often used to be stars)…
Need little capital expenditure, generate income, maintain market position or harvest the maximum earnings.
In the BCG matrix question marks…
Should they grow or be left? Build or harvest…
In the BCG matrix, Dogs (often ex-cash cows)…
Poor return, but may be useful for keeping competitor out, divest (release resources elsewhere) or hold.
In terms of BCG matrix a business should be balanced with…
Cash cows providing finance for stars and question marks and a minimum of dogs.
The corporate appraisal is…
An analysis of SWOT - the Strengths, weaknesses, opportunities, threats of a business.
Mendelow maps stakeholders on a matrix ranked by level of interest and power. (Low or High)
LL => Minimal effort. HL => Keep informed. LH => Keep satisfied. HH => Key Players.
A mission is…
A formal document that states the business’ basic function in society expressed in terms of how it deals with stakeholders.
The GAP analysis analyses..
The difference between the desired future performance level and the expected future performance level. What are the objectives? What would happen if it did nothing to change?
Porter believes there are 3 generic competitive strategies…
Cost leadership, differentiation, focus or niche.
Cost leadership is…
Producing at lowest cost with latest technologies, minimising overheads, favourable access to supply, operations in cheap countries.
Differentiation is…
Provision of a product which industry believes is unique. Breakthrough, Improved, Competitive products.
Focus/Niche products…
Provide restriction to part of market, can be cost-focused or differentiation focused.
In Ansoff’s matrix, existing products in current markets…
you should persue market penetration, maintain or increase market share, secure dominance.
In Ansoff’s matrix, existing products in new markets…
should persue market development. New geographical areas, package sizes, distribution channels, pricing policies.
In Ansoff’s matrix, new products in current markets…
should pursue product development. New products and customers, force competitors to innovate, newcomers discouraged.
In Ansoff’s matrix, new products in new markets…
should pursue diversification, should have clear idea of expectations, prospects of growth, surplus funds should be invested in diversificaiton or to shareholders.
In SFA analysis businesses…
Analyse strategies against competitors based on Suitability, Feasability, Acceptability.
The plans that should be produced to implement a strategy are…
Strategic plan, business plan, Operational plan.
The emergent approach to strategic planning process combines …
Strategic choice with implementaiton as it is always changing.
In a resource based approach to strategic planning, the businesses mission, goals and objectives are determined following stakeholder analysis …
at the start of the process. (analysis and corporate appraisal stage or following SWOT analysis in corporate appraisal stage is for the planned stratey approach).
Competitors exist in the businesses _____ environment.
Task environment.
Change in law around a company is a change in ____ and requires ____.
Change in general environment (legal), requires crisis management (longer changes require planning).
In Porter’s value chain, which of HRM, Procurement, Outbound logistics, Technology are primary activities?
Outbound logisticsm the rest arr secondary support activities.
What is the difference between risk and uncertainty?
Risk is the possible variation in an outcome from what is expected to happen. Uncertainty is the inability to predict due to lack of information.
The downside / upside risks are…
The risks that something will go badly / well.
Pure risk is…
The possibility something will go wrong.
Speculative risk is…
The possibility something will go better than expected.
A CSF is…
A critical success factors, significant risks create obstacles to these. Particularly valued by groups of customers.
Risk appetite is…
The extent to which a business is willing to take on risk.
Business risk is…
Related to Strategy, enterprise, product, economic, technology, property.
Non-business risk is…
Related to financial risk or operational risk.
Financial risk is…
Credit or Market. Credit risk is loss suffered due to default of borrower (they won’t pay). Market risk is loss from changes in market price rate.
Other ways to break down Financial risk in detail break it into…
Liquidity risk (no cash), gearing risk (high borrowing), default risk (receivables don’t pay), Credit risk (credit rating is downgraded), foreign exchange risk, interest rate risk, market risk.
Operational risk is…
The risk of a change in value caused by the fact that actual losses incurred for inadequate or failed internal processes, people and systems, or from external events (inc. legal risk) differ from the expected losses.
Volatility is…
How the factor to which a business is exposed is likely to alter.
The greatest risks occur for a business when…
Exposure is high, Underlying factor is volatile, Impact is severe, probability of occurance is high.
When is risk management (analysis and minimise risk) necessary?
Sometimes legally (car insurance), sometimes regulatory, financial institutions e.g. building insurance.
A risk-based management approach is required…
for all UK companies listed in FTSE 350 under UK Corporate Governance Code 2012. EU regulations stipulate that a European listed company’s financial statements must contain a description of principal risks.
The risk management process consists of…
Awareness, assessment, response and control, monitoring and reporting.
Identifying risks can be done in two ways…
Top-down (senior managers working out what will happen if don’t achieve each CSF) bottom up (group of employees and expert at operational level)
Gross risk is…
Combining impact and probability.
Some possible responses to risk are…
Avoidance, reduction, sharing, acceptance.
A common response for low impact low probability risks is …
Acceptance
A common response for high impact low probability risks is …
Shared (insurance) or reduced (impact reduced to lower insurance premiums).
A common response for low impact high probability risks is …
Reduction
A common response for high impact high probability risks is …
Control with avoidance, reduction, sharing
Crisis management is…
Identifying a crisis, planning a response, confronting and resolving.
The three main types of crisis for business are…
Financial crisis, public relations crisis (like bad press), strategic (changes in business environment) crisis.
If a business has a large money demand from government and little money expected and small overdraft it could…
Accelerate receipts from customers (offer discounts), decelerate payments, increase short term sales, reduce expenses.
Some possible responses to risk are…
Avoidance, reduction, sharing, acceptance.
A common response for low impact low probability risks is …
Acceptance
A common response for high impact low probability risks is …
Shared (insurance) or reduced (impact reduced to lower insurance premiums).
A common response for low impact high probability risks is …
Reduction
A common response for high impact high probability risks is …
Control with avoidance, reduction, sharing
Crisis management is…
Identifying a crisis, planning a response, confronting and resolving.
The three main types of crisis for business are…
Financial crisis, public relations crisis (like bad press), strategic (changes in business environment) crisis.
If a business has a large money demand from government and little money expected and small overdraft it could…
Accelerate receipts from customers (offer discounts), decelerate payments, increase short term sales, reduce expenses.
Some possible responses to risk are…
Avoidance, reduction, sharing, acceptance.
A common response for low impact low probability risks is …
Acceptance
A common response for high impact low probability risks is …
Shared (insurance) or reduced (impact reduced to lower insurance premiums).
A common response for low impact high probability risks is …
Reduction
A common response for high impact high probability risks is …
Control with avoidance, reduction, sharing
Crisis management is…
Identifying a crisis, planning a response, confronting and resolving.
The three main types of crisis for business are…
Financial crisis, public relations crisis (like bad press), strategic (changes in business environment) crisis.
If a business has a large money demand from government and little money expected and small overdraft it could…
Accelerate receipts from customers (offer discounts), decelerate payments, increase short term sales, reduce expenses.
What is a disaster?…
Business operations or part of them break down leading to potential loss of equipment, data or funds.
A long term disaster plan usually consists of…
Standby procedures, recovery procedures, personnel management. Sections: definition of responsibilities, priorities, backup and standby arrangements, communication with staff, public relations, risk assessment.
What is COSOs definition of risk?
The possibility that an event will occur and adversely affect the achievement objectives.
Which of these is a downside risk: costs might rise, revenue might rise, controls may succeed, quality might improve.
Costs may rise, other are upside risks.
If Duamonds plc has had a wide range of returns to shareholders in recent years how volatile and risky are the shares?
Volatile as large variation in profits, therefore higher risk.
If staff are oblivious to the risks this is a … (Business, enterprise, financial, operational risk)
Operational risk
Gross risk facing a business is measured by…
Impact x probability
Reducing the number of staff on a risky procedure and giving them more training is a response of…
Avoidance and reduction.
If a company works in a politically unstable country and has another firm backup its files this is part of the company’s…
Disaster recovery plan.
Good business information should be ACCURATE which stands for…
Accurate, complete, cost-beneficial, user-targeted, relevant, authoritative (reliable), timely, easy to use.
What makes information valuable?
It’s source, ease of assimilaiton (is it easy to understand), Accessibility, Relevance.
How can you assess the value of information?
If it’s not used then it’s not valuable, consider the extra benefits from getting it, the extra costs of obtaining it, monthly variance report only generates economoically consequential decisions if there is a control failure, control failures not easy to predict though, economic concequences of decisions not easy to predict.
What is a TPS?
Transaction processing system (for routne tasks)
What is an MIS?
Managament information system. Converts data from mainly internal sources into information. Regular reports and online access to business current and historical performance.
What are the CATIVA requirements for information processing from data to information to be effective?
Completeness, accuracy, timeliness, inalterability, verifiability, assessability.
