Ch 8. Management Activities of Planning, Organising & Controlling Flashcards
Planning
Clearly setting out the goals for the organisation and how these are to be achieved
Stages in the planning process (4)
- Analyse the situation (where are we now)
- IdentIfy the goal (where do we want to go)
- Draft a plan (how will we get there
- Implement and review (break into manageable steps & review progress)
SWOT analysis
A management technique used to access a business in terms of its strengths, weaknesses, opportunities and threats
Mission Statement
Short but precise one-or-two sentence statements used by companies to summarise ‘who we are, what we do and where we’re headed’
Types of plans (4)
- Strategic plan
- Tactical plan
- Operational plan
- Contingency plan
Strategic plan
Long term plan for the whole business
Normally covers 5 or more years
Tactical plans
Break the general strategic plan down into shorter, more specific and manageable steps, usually one or two year periods
Operational plans
Short-term plans that set targets for weeks or months ahead
Contingency plans
Special plans prepared to cope with emergencies or unexpected circumstances
An effective plan (SMART)
- Specific
- Measurable
- Agreed
- Realistic
- Timed
Why is planning important to management (7)
- Helps identify internal strengths
- Helps identify internal weaknesses
- Helps identify new opportunities
- Helps identify threats
- Sets out clear targets
- Assists leadership and motivation
- Provides the necessary information to investors
Organising
Bringing people and resources together effectively to implement plans
Organising allows a manager to..(4)
- Identify the work to be done
- Create a suitable organisational structure
- Identify who will do what tasks
- Maintain a clear chain of command
Organisational structures
Identify the different departments and management functions in an organisation
Types of organisational structures
- Functional
- Product
- Geographic
- Matrix/team-based
A functional structure
Divides a business into different departments according to the management functions of marketing, production, human resources and finance
Advantages of functional structures (2)
- Builds up staff skills and expertise
- Provides clear promotional paths
Disadvantages of functional structures (2)
- Employees lose sight of the overall business mission
- Communications can be slow
A product structure
Organises a business on the basis of the products it makes
Advantages of product structures (3)
- Improves communications
- A business can adapt different products to customer needs
- Focus on its own customers
Disadvantages of product structures (2)
- Wasteful competition between different product divisions
- Wasteful duplication of management
A geographic structure
Divides the organisation according to the geographical markets it serves
Advantages of geographic structures (2)
- Meet local customer needs
- Healthy competition
Disadvantages of geographic structures (2)
- Wasteful duplication of resources
- Lack of co-ordination
Matrix structures
Staff are brought together into teams to achieve a clearly stated team goal, such as launching a new product
Characteristics of successful team management (3)
- Self-managing
- Responsibilities
- Input into decision-making
Advantages of matrix structures (4)
- Synergies
- Efficiency
- Better relationships
- Motivatin
Disadvantages of matrix structures (2)
- Two bosses (slow decision making)
- Training costs
Organisational charts show (3)
- Layers of command
- Chain of command
- Span of control
The chain of command
How decisions flow from the top of an organisation down through the layers to the bottom
Span of control
The number of people reporting directly to a manager
Delayering
Reducing the number of layers in the organisational structure of a business
Organisational structures should be…. (5)
- As simple as possible
- Allow easy communication
- Narrow spans of control
- Wide spans of control
- Cost effective
Why is organising important to managers (3)
- Creates a suitable organisational structure
- Establishes a clear chain of command
- Facilitates smooth upward and downward flow of communication
Management control
The continuous monitoring and checking of results to see if they are in line with the goals and targets set out in the plans
Types of management control (4)
- Stock control
- Quality control
- Credit control
- Financial control
Stock control
Ensure that firms have the right quantity and type of goods in stock at the right time, without incurring stockholding costs, such as insurance, security, rent
Buffer stock
The minimum level of stock that should be held
Once stock falls below the buffer level, more should be ordered
Proper stock control improves…. (3)
- Profitability (less money tied to inventory)
- Cash flow
- Storage space
Just-in-time
Stock control system in which stocks of raw materials, components of finished goods are delivered just when they are needed, no sooner or no later
Quality control
Ensuring that the quality standards expected by customers are properly met
Quality control can (4)
- Reduce waste and costs
- Increase customer satisfaction
- Help promote a quality image
- Meet legal responsibilities (Sale of Goods and Supply of Services Acts)
Quality control can be achieved by… (5)
- Regular inspection of the quality of goods
- Recruiting and training
- More facilitator management
- Facilitating teamwork
- Quality circles
Quality circles
Discussion groups made up of employees who meet regularly to discuss and resolve quality issues
The ISO
- International standards office
- Provides internationally recognised quality control standards
The Q Mark
A quality standard awarded by Excellence Ireland Quality Association
Credit
Selling goods now but not getting paid until later
Credit control
Monitoring which customers are given credit and for how long and ensuring they pay on time
The Credit Controller
The person responsible for managing credit given to debtors and collecting payments
Credit control can be improved by
- Offering discounts
- Taking out insurance against debts
- Research customer credit backgrounds
- Refuse to give credit
Financial control
Used to monitor the financial affairs of the business to ensure it is profitable and always has enough money to pay its bills
Financial control can be achieved by using…(4)
- Cash-flow budgets
- Ratio-analysis
- Cost control
- Break-even analysis
Why is control important to managers (6)
- Identifies deviations from plans
- Reduces waste
- Ensures the right stock is available at the right time
- Keep bad debts to a minimum
- Improve product quality
- Monitor financial health of the business
