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M92 - andy > Chapter 3 > Flashcards

Chapter 3 Flashcards

1
Q

How long are the goals for strategic planning normally cover

A

Between 3 and 10 years depending on the nature of the industry

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2
Q

What industry requires long-term strategic planning

2 business and 2 industries

A

Life and pensions businesses as well as industries such as oil and production 

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3
Q

What does Smart stand for

A

Specific, measurable, achievable, relevant and time defined

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4
Q

When implementing the business plan what is a control process

A

A series of milestones

Identifying benchmark valuation, strategic and operational performance

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5
Q

What are examples of control models (7 examples listed)

A 
Management accounting
Budgeting
Critical success factors
Key performance indicators
Balance scorecard
Management by objectives
Benchmarking
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6
Q

What are critical success factors

A

A high level goal that is imperative for a business to meet

Certain factors such a critical to realising it’s mission either by exploiting opportunities or by finding of the dangers posed

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7
Q

What are usually derived from critical success factors

A

Swot analysis (strengths, weaknesses, opportunities and threats)

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8
Q

What are key performance indicators

A

A quantifiable measure of performance over time for a specific objective

They are quantifiable points in the development of a company strategy to show whether or not the company is reaching its target and objectives

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9
Q

Can key performance indicators be results orientated or effort orientated

A

Both

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10
Q

What are the four perspectives of a balance scorecard

A

Internal, customer, learning and growth, financial

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11
Q

What should key risk indicators cover

A

IT downtime, fraud, complaints, property loss or damage, employee injury

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12
Q

What does a balance scorecard identify

A

Is the company/colleagues are following/ enhancing the strategic plan via the objectives set

The knowledge, skills and systems that employees will need in order to innovate and build the right strategic capabilities and efficiencies that deliver specific value to marketplace which are eventually lead to a higher shareholder value

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13
Q

What is benchmarking

A

A process that allows the company to compare its own progress with that of a comprehensive standard

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14
Q

What is this example of

A companies growth will be measured against the growth of the UK economy as a whole or another organisation or operating in the same industry

A

Benchmarking

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15
Q

What are the three types of benchmarking

A

Internal: compare the performance of divisions and departments internally
External: compares against competing firms
Functional: Compare the main functions of processes against other organisations but not necessarily competitors

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16
Q

What is management by objectives

A

A process of defining objectives within an organisation so everybody agrees objectives and understand what I need to do

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17
Q

When is management by objectives appropriate

A

The knowledge based organisation such as insurance company

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18
Q

Under management by objectives of the success of achievement of organisational goals for quite a number of Key management factors, namely that:

A
  1. There must be complete support from the top management
  2. Its job is directed towards same goals
    3. each managers target form it supposed to be to ride targets
  3. Each manager was know what their performance targets are
  4. A manager superior must know what to demand for the manager
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19
Q

What is forecasting

A

The method by which a budget is put together by directors and senior management

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20
Q

What is variance analysis

A

Where department or individuals will usually be expected to provide reasons for any significant variances in the budget

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21
Q

What three things does forecasting cover

A

Levels and types of business or transacted
Turnover the business produces
Income such as investment returns

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22
Q

What are the four advantages of budgeting

A

Unification of effort
Planning
Financial awareness
Basis of comparison

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23
Q

What does a budget show

A

The income and expenditure expected during a financial period

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24
Q

Who begins the budgeting process

A

The chief executive issues general guidelines at the master budget to the principal heads of departments

25
Q

What happens when budgeting after chief executive guidelines are released

A

Each department head discusses that with the relevant members of our team
Each department drive to put together its own budget ensuring it matches objective of the master budget

26
Q

What is top-down budgeting

A

The owners or directors decide on individual plans for each department and function and these plans are given to the individual manager to implement. Easy to operate

27
Q

What is bottom up budgeting

A

Individual department managers construct their own budget within set guidelines.
They are then passed up to the managers and directors individual budget and organisations master budget

28
Q

What are the two methods of bottom up budgeting

A

The fixed budget and flexible budget

29
Q

What is a fixed budget method of bottom up budgeting 

A

It’s not changed once it has been established regardless of any alterations in the organisations performance in reality

30
Q

What is a flexible budget method when bottom up budgeting

A

It’s a change in accordance to the organisation‘s real activity levels over time
I.e If a salary costs increase unexpectedly halfway through the budget period

31
Q

What is zero based budgeting

A

Relies on managers to justify their expenditure from a fresh standpoint
Requires manager to start a position of having nothing in a budget the ultimate question they have to justify what they want going forward

32
Q

When is zero-based budgeting normally used

A

The cost of individual a self-contained areas of work such as research, machine maintenance and legal services

33
Q

What are rolling budgets

A

They are budgets are currently look forward. With a 12 month rolling budget you come to the end of each month and a new month is added at the far end of a whole 12 month period. Managers are always looking 12 months ahead and make alterations in the future budget on a regular basis

34
Q

What is a budget variance

A

The difference between actual and budgeted performance

35
Q

What are the two types of variances

A

Unfavourable variance and favourable variance

36
Q

What is an unfavourable variance

A

When budgets are not met

37
Q

What is a favourable variance

A

When budgets are exceeded

38
Q

Why do unfavourable variances need to be investigated

A

Preventative measures can actually be implemented to bring the spend back on budget also that effect can be minimised

39
Q

Why does a favourable balance need to be investigated

A

Select contributing factors can be nurtured an affect incorporated in the future plans

40
Q

What are the causes of variances

A

Inadequate pricing
Higher expenses than planned
Random events for example an IT breakdown
Operating efficiency

41
Q

What are the 5 C’s of decision making

A

Consider: preparation of stage of which the problem is considered
consult: which Initative is a taken to involve those affective
Crunch; we need to ensure that something is done
communication; explanation to staff
Check: go back and monitor results of a decision

42
Q

What information does a manager needs when looking at colleagues

A

Level of productivity
What resources are available
Are objectives been met

43
Q

Information within an organisation is to be analysed into what 3 levels

A

Strategic, tactical, operational

44
Q

When a strategic information used

A

By senior managers to plan objectives of their organisations and to assess whether objectives are being met

45
Q

What are examples of strategic information

A

Overall profitability
Future market prospects
Availability and cost of raising new funds
Total cash needs

46
Q

What is tactical information

A

Used by middle management to ensure that resources of the business are employed to achieve the target objectives of their organisation

47
Q

What level of information is in example of tactical

A

Productivity control or variance analysis report and cash flow forecast

48
Q

Where is the emphasis for tactical information

A

Generated Within the organisation and is likely to have an accounting emphasis it can be prepared regularly 

49
Q

What is operational information

A

Used by front line manager such a supervisors to ensure that specific tasks are planned and carried out properly

50
Q

What is a management information system

A

A database of financial information organised to produce regular report and operations for every level of management

51
Q

What is the main purpose of a management information system

A

To give managers feedback about their own performance and enable senior management to monitor the company as a whole

52
Q

What is a codification strategy

A

Knowledge is carefully codified and stored in a database where it can be accessed and used easily by appropriate employees

53
Q

What is a personalisation strategy

A

Knowledge is closely tied to the person who developed it and shared mainly for a direct person-to-person contact instructor training programs

54
Q

What two main areas of the organisation strategy does knowledge management have an impact on

A

Creating value for customers and operational economies

55
Q

What knowledge management system is more appropriate for mature services

A

Codification strategy

56
Q

Which knowledge management is best used for innovative services

A

Personalisation strategy

57
Q

What is a balance scorecard?

A

A set of objectives the business follows to align with the strategic plan

Is a management system aimed at translating an organisations strategic goals into a set of performance goals

58
Q

What is a balance scorecard meant to measure?

A

The intellectual capital of a company through four main areas
Internal processes
Learning and growth
Customers and finance

M92 - andy (27 decks)

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