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Management Accounting Strategy > Chapter 3 MAS > Flashcards

Chapter 3 MAS Flashcards

1
Q

What is organisations structure

A

Grouping of people into departments or section and the allocation of responsibility

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2
Q

Name five components of Mintz erg organisations

A 
Strategic apex
Operating core
Middle line
Support stuff 
Technostructure
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3
Q

What does Mintzberg effective organisation say

A

It suggest that the organisation can be analysed i six building blocks and that effective Co-ordination will be needed to integrate the building blocks into one cohesive unit

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4
Q

Operating core

A

Basic work of the organisation

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5
Q

Strategic apex

A

Higher levels of management responsible for formulating the strategy and long-term plans

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6
Q

Middle line

A

Links the strategic apex to the operating core, includes middle and lower management

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7
Q

Technostructure

A

Responsible for designing procedures and standards

It also includes accountants and computer specialist

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8
Q

Support stuff

A

Provide services to the organisation which support operations /production

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9
Q

Ideology

A

Organisation value and beliefs (culture)

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10
Q

Entrepreneurial structure

A

Structure build around the owner’s manager

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11
Q

Functional structure

A

Groups together employees that undertake similar tasks

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12
Q

Divisional structure

A

Splits organisation into several division either product based or geographic based.

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13
Q

Matrix structure

A

A combination of a functional and a divisional structure

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14
Q

Tall structure

A

Few managerial levels

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15
Q

Flat organisations

A

Many manegerial levels

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16
Q

Scaler chain

A

Length

The line of authority which can be traced up or down the chain command

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17
Q

Span of control

A

How many people report to one superior

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18
Q

Factors that influence the span of control includes what?

A

Nature of the work
Type of personnel
Location of personnel

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19
Q

Centralization structure

A

The upper levels of an organisation’s hierarchy retains the authority to make decision

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20
Q

Decentralization structure

A

The authority to make decisions is passed down to units and people at lower levels

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21
Q

Characteristics of entrepreneurial structure

A
  • Build around the owner’s manager
  • Typical of small Companies
  • structure is totally centralized with all key decisions being made by the strategic leader /owner
22
Q

Dis(Advantages) of entrepreneurial structure

A

Advantages

  • Fast decision making
  • Good control
  • Mare responsive to market
  • Close bond to workforce

Disadvantages

  • success is dependent on the capability of the owner-manager
  • lack of career structure
  • cannot cope with deversification (growth)
23
Q

Characteristics of functional structure

A
  • used commonly in organisation that have outgrown the entrepreneurial structure
  • group employees that undertake similar tasks
  • appropriate to smaller companies with few products and location and which exists in a relatively stable environment
24
Q

Dis(Advantages) if functional structure

A

Advantages

  • economic of scale
  • Standisation of outputs system
  • specialists more conformable
  • career opportunities

Disadvantages

  • empire building
  • slow adaption to market changes
  • cannot cope with growth
25
Q

Characteristics of divisional structure

A

Headed by general manager who takes responsibility for their own resources

26
Q

Dis(Advantages) of divisional structure

A 
Advantages
*enables product/geographic growth
*clear responsibility for divisions
*training of hrnrra managers
' decisions making
*top management free to vo cetrayr on strategic matters.

Disadvantages

  • duplication
  • lack of goal congruence
  • potential loss of control
  • allocation of central costs can be a problem
  • specialist may feel isolated
27
Q

Characteristics of Matrix structure

A
  • combines the benefits of functional and divisional structure
  • found in multi-product and multipl functional organisations with significant interrelationships and intrerpendencies
28
Q

Dis(Advantages) of Matrix structure

A

Advantages

  • advantages of both functional and divisional structure
  • flexibility
  • encourage teamwork and exchange of opinions and expertise

Disadvantages

  • dual command
  • lack of individual accountability
  • time consuming meetings
29
Q

Factors affecting the amount of De(centralization)

A 
Management style
The ability of management /employees
Geographic spread
The size of the organisation
Ideology
30
Q

Advantages of decentralization

A
  • senior management free to concentrate on strategic stuff
  • better local decision
  • Better motivation due to increase empowerment employees
  • quick response
31
Q

Disadvantages of decentralization

A

Loss of control by senior management and lack of standarsation
Dysfunctional decision
Poor decisions made by inexperienced managers
Training cost
Duplication of roles within an organization

32
Q

Traditional hierarchical triangle

Bottom of triangle

A

Broad base of finance workers carrying out operational enabling roles

33
Q

Traditional hierarchical triangle

Middle of the triangle

A

Narrow set of management level finance workers who carry out shaping roles

34
Q

Traditional hierarchical triangle

Top of the triangle

A

Narrower group of senior finance staff and concentrate on narrating how role of finance (corporate) reporting

35
Q

Diamond shape - digital age

Much lower level

A

Assembly and processing tasks performed by technology

36
Q

Diamond shape - digital age

Central bulge

A

As a result of many higher services Now being offered

37
Q

Diamond shape - digital age

Flat top

A

Move to collaborative Finance leadership approach

38
Q

Diamond shape - four levels

A

Level 1 senior finance team
Level 2 strategic business partnering
Level 3 digital centres of excellence
Level 4 smart finance factories

39
Q

Senior finance team

A

Leads the finance team to achieve the desired organizational impact

40
Q

Strategic business partnering

A

Work with internal and external stakeholders to influence and shape how the organization creates /preserves value.

41
Q

Digital centres of excellence

A

Specialist generate further insight above value creation and preservation in areas of specialism

42
Q

Smart finance factories

A

Assemble and extract data to provide information and preliminary insights

43
Q

3 main reason why the finance function is changing

A
  1. The changing mandate for finance
  2. Technology
  3. Finance function capability
44
Q

Outsourcing

A

Contracting out aspects of the work, previously done in house. To specialist providers

45
Q

Offsouring

A

Relocation of corporate activities to foreign country

46
Q

Shared service Centre

A

Centralized function, serving a large multinational organisations. Sometimes referred to as internal outsourcing

47
Q

Transaction costs

A

Cost of having business activitity performed by a third party. Classified as indirect cost

48
Q

Main types of transaction cost

A

Search and information cost
Bargaining cost
Policing and enforcement costs

49
Q

Service level agreements (SLA)

A

It is negotiated agreement between the suppliers and the customer and is legal agreement regarding the level of service to be provided

50
Q

Benefits and drawbacks of outsourcing the finance function s activities

A

Advantages

  • Cost reduction
  • Radical transformation
  • Access to superior capabilities, expertise and resources
  • Business partnering

Disadvantages

  • Loss of control
  • Managing the outsourced services
  • Cause of disruption
  • Risk of intellectual property theft and data breaches.
  • Erosion of internal knowledge and skills.
51
Q

Features of Matrix structure fl

A

Functional groups
Geographic divisions
Product based division
Teams

52
Q

Explain how finance function is copeing with the shift of organisation

A
  • it has a unique end to end views of the organisation understanding every activity has a financial concequence
  • its accounting information is trusted and credible
  • it already provides a framework for performance
  • it brings professional, evidence based objectivity to decision making

Management Accounting Strategy (12 decks)

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