Class Notes Flashcards

Question

What is the secondary goal of a profit seeking organisation?

Answer 1

Anything else that the organisation chooses to do in support of the primary goal

Answer 2

To do whatever the organisation is there to do

Answer 3

Secondary goals support the primary so raising funds and surviving

Answer 4

The concept that corporations exist to maximise the wealth of their owners causes the following behaviours to apply: - As a means to make decisions - As a basis upon which divisions and their managers may be evaluated

Answer 5

Non-financial goals e.g. ethical fund shareholders Long term viability Corporate responsibility - the good of society and the natural environment

Answer 6

The primary goal of the organisation

Answer 7

Board level

Answer 8

Which products and markets to pursue Major investment decisions Allocation of resources to its business units How it will raise finance

Answer 9

The managers at this level

Answer 10

What products it should make How will it achieve competitive advantage How it will conduct its marketing

Answer 11

Strategies for day to day operations that will lead to goal congruence

Answer 12

Strategic analysis Strategic Choice Implementation Review and control

Answer 13

SWOT (External and internal) analysis Corporate appraisal Mission and objectives Gap analysis

Answer 14

Analysis of what is missing between what we have now and what we aim to have

Answer 15

Picking the method

Answer 16

Doing the chosen method

Answer 17

Gives a time frame to work to Time to ensure resources will be available Well structured so allows inputs from all leaders Promotes goal congruence Considers internal and external

Answer 18

Takes time In a dynamic market, market could have changed before implementation Less opportunity for quick innovation if resources are tied up Top down so lower level staff may be demotivated

Answer 19

Strategy born out of a combination of intention and opportunity

Answer 20

When the conditions in the organisation are right to spot and harness them

Answer 21

Intended Deliberate Unrealised Emergent Realised

Answer 22

The result of formal planning process

Answer 23

The intended plans have been put into action

Answer 24

The intended plans that didn't happen

Answer 25

Strategies created by force of circumstance

Answer 26

The final realised strategy whether emergent or deliberate (the ones that actually happened)

Answer 27

True The process of choice and implementation will take place together

Answer 28

The whole organisation is working towards the same goal

Answer 29

Specific Measurable Attainable Relevant Timebound

Answer 30

If they are open or closed

Answer 31

An open objective is a principle to be followed akin to a goal. Examples would include the achievement of excellent customer satisfaction or to demonstrate a competitive return on capital employed.

Answer 32

A closed objective is a specific measurable target. Examples are customer satisfaction could be set at an average of 4.5 out of 5 by the end of the year and projects must deliver a minimum return of 20% over its lifetime.

Answer 33

Achieving a particular response from a various target stakeholder

Answer 34

Surplus maximisation (equivalent to profit maximisation) Revenue maximisation Utilisation maximisation (as in leisure centre swimming pool usage) Management of capacity available (such as hospital beds) Full or partial cost recovery (to minimise subsidy needed) Budget maximisation (making full use of what is offered) Maximising the satisfaction of various stakeholder groups

Answer 35

1 to 3 years

Answer 36

3 to 10 years

Answer 37

More than 10 years

Answer 38

1) Formation of objective - Not considering lines of business for ethical reasons 2) Ethical climate in which it operates - raises expectations 3) Internal appraisal - should be sustainable 4) Strategy selection - ethical implications of proposed strategies

Answer 39

Groups or persons with an interest in what the organisation does

Answer 40

Internal Connected External

Answer 41

It places them in a matrix based on power and influence

Answer 42

Minimal effort Eg. Community

Answer 43

Keep them informed Eg. Individual employee

Answer 44

Keep satisfied Eg. HMRC

Answer 45

Key players - keep happy and informed E.g. Investors

Answer 46

1) The influence stakeholders have over other stakeholders 2) Would strategies cause stakeholders to move from one quadrant to another 3) What is the disruptive power of a stakeholder 4)Do stakeholders interest conflict with each other

Answer 47

Macro Micro

Answer 48

So it can: -Take advantage of new opportunities as they arise - Minimise current and identified future risks

Answer 49

Big environments e.g countries

Answer 50

Smaller environments e.g. industries

Answer 51

Political Economic Social Technological Environmental Legal

Answer 52

Little influence

Answer 53

Big influence

Answer 54

Integrity of the source Corroboration and substantiation Former historic accuracy Age of the information Motivation of the source provider

Answer 55

Dissemination

Answer 56

Placing documents on the intranet

Answer 57

Holding annual management development sessions

Answer 58

Static environments where the participants enjoy relative certainty over the future and little changes over a long period of time. These organisations might be severely disrupted by a short-term shock to the environment and may fail as a result.

Answer 59

Dynamic environments, which is characterised by constant and potentially rapid change. These firms must remain flexible to be able to adapt.

Answer 60

Scenario planning: The development of pictures of potential futures for the purposes of managerial learning and the development of strategic responses.

Answer 61

A long-term view of strategy is needed and where there are a few key factors influencing he success of the strategy

Answer 62

Yes It looks much longer term Considers plausible directions an industry may head Seeks to consider a range of potential outcomes not just one

Answer 63

To build scenarios, an organisation takes the following steps: (1) Identify key forces, using techniques such as PESTEL analysis. (2) Understand the historic trend in respect of the key forces. (3) Build future scenarios, for example, optimistic, pessimistic and most likely. The scenarios generated are then ‘plots’ to be played out making managers consider future possibilities and encouraging them to think about strategy more flexibly.

Answer 64

Policies and attitudes Government stability Spending Taxation Foreign policy

Answer 65

Globalisation Interest rates Exchange rates Business cycle Financial infrastructure

Answer 66

Income levels Demographic changes Attitudes and behaviours Fashions Education

Answer 67

New ideas Use of R&D Speed of change Uncertainty Cyber crime

Answer 68

Sustainability Pollution Disasters Pressure groups Natural capital

Answer 69

Regulation Taxation law Competition law Employment law Enforceability

Answer 70

Globalisation: The production and distribution of products and services of a homogenous (same) type and quality on a worldwide basis.

Answer 71

 It provides the opportunities of new markets to exploit.  It introduces competition in the home economy from foreign firms.  It offers an opportunity of relocating parts of business activity (or supply chain) to countries able to perform them better or more cheaply.  May drive cross-border acquisitions and alliances.

Answer 72

Factors encouraging development of global business

Answer 73

Customer - does it satisfy common customer tastes in a different country Company itself - fixed costs will spread over increasing sales volume Competition - Could intensify innovation and competition if other local competitors follow suit Currency volatility - Reduces exchange rate risks inherent in exporting and may also help to get around government imposed trade barriers Country - cheaper labour, materials and finance, plus goodwill of host governments

Answer 74

Fuck Sakes Don't Remember Sugar Donuts Reliable Favourite

Answer 75

Strategy, structure and rivalry Demand conditions Related and supporting industries Factor conditions

Answer 76

Government Chance events

Answer 77

Advanced factors Basic factors

Answer 78

Natural resources Climate Unskilled and semi skilled labour

Answer 79

Digital communications Highly educated personnel

Answer 80

What people want

Answer 81

Success often relates to success in related industries Sometimes from local proximity or from expertise in he related industry

Answer 82

Structure - Refers to certain national cultural factors that orientate business people towards certain industries. Strategy concerns how companies have managed their financing and whether they chose to innovate within an industry to obtain competitive advantage or diversify into multiple industries (conglomerates). Domestic rivalry, or the absence of it, affects how businesses have developed. Where it is intense, tough domestic rivalry can teach businesses about innovation and competitive success on a global scale.

Answer 83

Political risks in international business Protectionism in international trade

Answer 84

The stability of the government International relations Ideology of government and role in the economy Informal relations

Answer 85

Discouragement of imports by for instance intro of tarrifs or imposition of quotas in order to favour local producers

Answer 86

When: - Appraising an industry that a business may consider entering - Looking for opportunities or threats to a business within an industry - Determining whether any forces have shifted following a change of strategy by any of the participants in the industry

Answer 87

The government Complementors

Answer 88

Competitive Rivalry Bargaining Power of Customers Threat of Substitutes Bargaining Power of Suppliers

Answer 89

Many businesses will not be successful and will exit the market

Answer 90

Not helpful for Not-for-profits Uses positioning view not resource based view Less useful in dynamic industries Ignores potential for collaboration

Answer 91

Introduction Growth Shakeout Maturity Decline

Answer 92

Considering: The suitability of a proposed strategy R&D expenditure Developing a balanced portfolio Decision on marketing costs

Answer 93

Initial high-income country Originator's initial export market Third party export markets Secondary third party export markets

Answer 94

Public accountability Intrinsic variability Political consideration Purchase by tender

Answer 95

Level of economic development Cultural similarities Members of economic groups Market similarities Market timing differences

Answer 96

Brand travel Local know-how Legal barriers

Answer 97

Public accountability Intrinsic variability Political consideration Purchase by tender

Answer 98

The government must be seen to be spending taxpayer funds wisely

Answer 99

Different government departments may exhibit different cultures, agendas and resources. Variability may also exist on a regional basis.

Answer 100

Public procurement will look at the whole social benefit, not just the cost. Additional matters include employment and sustainability.

Answer 101

Governments often acquire products and services through tendering: – Open tender offers the opportunity to any business. – Selective tender requires a provider to be prior approved before it may tender. It may take considerable persistence to get to this stage.

Answer 102

Those things in an organisation that must ‘go right’ or ‘be done well’ for it to succeed. There will be numerous CSFs

Answer 103

A numerical expression of something that can be measured, which demonstrates the achievement of a CSF. To be effective, a KPI needs a target or benchmark to be compared against.

Answer 104

What we have and what we can do

Answer 105

The basic resources needed by all firms in the market

Answer 106

Resources that give the firm a sustainable competitive advantage over its competitors

Answer 107

Activities and processes required to be able to stay in business

Answer 108

The critical activities and processes that enable the firm to meet its CSFs and therefore achieve a sustainable competitive advantage

Answer 109

Competitive architecture Reputation Innovative ability

Answer 110

The network of relationships within and around a business that help create core competences. Can be split into: Internal - relationships with employees External - relationships with suppliers, customers Network - relationships between collaborating businesses

Answer 111

The ability to develop new products and services and maintain a competitive advantage.

Answer 112

A company reviews its strategic capability based on its resources and which resources underpin its competitive advantage.

Answer 113

Resource audits

Answer 114

1) Men and women 2) Money 3) Machinery 4) Materials (suppliers) 5) Markets 6) Management 7) Methods 8) Make-up 9) Management information systems

Answer 115

Organisation structure and culture

Answer 116

A factor which at any time, or over a period, may limit the activity of an entity, often occurring where there is shortage or difficulty of availability.

Answer 117

Make the best use of the resources available

Answer 118

Reduce the shortfall - obtain more or outsource Economise on use - reconsider the activities that consume that resource

Answer 119

Primary and support activities

Answer 120

Inbound logistics Operations Outbound logistics Marketing and sales Service

Answer 121

Firm infrastructure Technology Development Human Resource Management Procurement

Answer 122

By looking into each category and establishing the cost drivers and/or value drivers.

Answer 123

Does something reduce the cost or increase the cost?

Answer 124

Something that customers may value and thus influence them to buy.

Answer 125

Cost leadership Differentiation Focus/niche

Answer 126

A firm is a cost leader if the components of the value chain deliver value through cost savings. Seeks to position as lower cost producer in the industry. Either sell cheaper or have large profit

Answer 127

Differentiation strategy: a firm is a differentiator if it delivers value to its customers by positively setting itself apart from its competitors Seeks to stand out and therefore enjoy a higher price

Answer 128

Potential to occupy a position ignored by competitors - makes it easier Avoids spreading the business to thinly and sticks to what it is good at

Answer 129

Focusing on a smaller target segment of the market may sacrifice economies of scale Risk of disruption if the market changes

Answer 130

Stuck in the middle Could struggle unless you strike the perfect compromise

Answer 131

Considers value chains beyond the companies boundaries E.g suppliers to organisation, to distribution to customer

Answer 132

They may be able to replicate parts but it is difficult to copy linkage

Answer 133

Help understand strengths and weaknesses Identify value activities to id targeting capital investment Compare with competitors to identify sources of differentiation Identify opportunities for synergy between the firm and a potential acquisition

Answer 134

Supply chain management (SCM): the management of all supply activities from the suppliers to a business through to delivery to customers.

Answer 135

Responsiveness - The ability to supply customers quickly ( Just-in-Time (JIT) throughout the chain) Reliability - The ability to supply customers reliably (Total Quality Management (TQM)) Relationships - The use of single sourcing and long term contracts to integrate the buyer and supplier

Answer 136

Extranets Electronic Data interchange (EDI) GPS satellite tracking Radio frequency indentification (RFID)

Answer 137

Lifecycle and BCG matrix

Answer 138

Compare relative market share and rate of market growth

Answer 139

Your sales ---------------------------- Largest competitor sales

Answer 140

Anything 10% or above

Answer 141

Relative Market Share High Low High Star Question mark Market Growth Low Cash Cow Dog

Answer 142

No not if it is profitable

Answer 143

Invest money to build market share

Answer 144

Is the market attractive? Will it require significant funding? Is it better to remain small, offload product and shut down?

Answer 145

Demonstrable success will attract newcomers Cash must be heavily reinvested Expectation of moderate net cash flows

Answer 146

Need very little capital expenditure Generate high levels of cash income It is unlikely new entrants will join Little investment is required Large market share can be used to exploit available opportunities Large net cash flow Returns should be used to finance stars and question marks

Answer 147

It provides no real insight into how to compare one opportunity with another. Nor does it consider any inherent riskiness of a particular product line or service.  Only one star or cash cow may exist in a market. Perfectly competitive products end up unfairly being labelled as question marks or dogs!  The rate of profit for some product lines and business units can actually be very high. In the right conditions, a company can profit from a low share of a market.  Factors besides market share and sales growth affect cash flow e.g. amount of R&D and investment in new technologies.

Answer 148

Strengths Weaknesses Opportunities Threat

Answer 149

S & W are internal O & T are external

Answer 150

Conversion is turning bad into good So weaknesses into strengths and threats into opportunities Matching is the idea of matching strengths to opportunities

Answer 151

Gap analysis: the comparison between an entity’s ultimate objective and the expected performance from projects both planned and underway, identifying means by which any difference (gap) might be filled.

Answer 152

Efficiency Expansion Diversification

Answer 153

Market penetration Product Development Market Development Diversify

Answer 154

Related -Vertical -Horizontal Unrelated

Answer 155

It integrates supplier (backward or upstream processes) or customer (forward or downstream) chain activities.

Answer 156

can be broken down still further: – Competitive products is the takeover of a competitor, broadening the product portfolio and increasing market share. – Complementary products uses commonality of competence and resource to enter a new market with new products on familiar terms. – By-products commercialises by-products from production processes. This revenue stream should be seen as non-core and something of a windfall.

Answer 157

Creates a portfolio of businesses with no common theme. Success depends upon the ability of management to extract value from the various companies that make up the group.

Answer 158

A portfolio of companies balances out financial profits and losses. A company may grow quickly through the utilisation of surplus funds. Conglomerates, due to their size, may find it easier to access capital markets that fund mergers and acquisitions.  Gain access to cash or other financial assets such as property.  The conglomerate may have a strong brand and identity, which it can use to develop an acquired business.

Answer 159

Unrelated businesses may lack a common identity and offer little potential for operating synergies. It may be harder to justify acquisitions to shareholders, who may be better offer choosing which companies they wish to hold in their portfolios. Business failure can be damaging as it has the potential to drag down the rest as it consumes resources. Lack of management experience in target markets. Just because a company was successful in one market does not guarantee success in others.

Answer 160

Costs or things that make it difficult to withdraw a product

Answer 161

Cost barriers If the product is acting a loss leader - companies rep for breadth of coverage Enabler or gateway product to sell other profitable Appearance of failure in the market

Answer 162

Rationalising the businesses in a portfolio enables management to focus on the core. Raising funds for whatever purpose the conglomerate wishes. Protecting the conglomerate from being taken over and being split anyway by new owners. Satisfy investors by enabling them to manage their own portfolio. Outside of Asia, conglomerates are less fashionable to investors than they once were.

Answer 163

Suitability Feasibility Acceptability

Answer 164

Simple structure Single owner/manager Flexibility and swift decision making Limited ability to expand due to reliance on one person

Answer 165

Bureaucracy Board of directors then set functions/specialisms Less cross functional innovation Unsuitable for highly dynamic environments

Answer 166

Multiple functions and products with cross communication

Answer 167

Product managers gain big picture views Can rotate product members to gain experience Greater understanding of departmental challenges and co-operation Functional managers act as a source of knowledge

Answer 168

Functional manager may feel demoted and become demotivated Stress from having two bosses More costly to implement Goes against classical management theory Slow decision making

Answer 169

Short-term products within a single company Large projects Geographical arrangements

Answer 170

When a business can be divided into autonomous units based purely on: geography, product or market, and type of operation. All grouped under a head office

Answer 171

Operating core Middle Line Strategic Apex Support Staff Technostructure 6th = Ideology

Answer 172

Simple structure (entrepreneurial) Machine bureaucracy (functional) Professional bureaucracy Divisionalised Adhocracy (matrix)

Answer 173

The number of people reporting to one person

Answer 174

Upper levels retain authority to make decisions

Answer 175

Ability to make decisions is passed down to lower levels of the hierarchy

Answer 176

A single site within an organisation that carries out processing activities that were previously conducted by a number of different departments or the same kind of department found in a number of business units.

Answer 177

Cost savings of reducing headcount Realisation of economies of scale from a single location Knowledge sharing and development of best practice Standardised processes ensure all departments are treated consistently

Answer 178

Loss of knowledge Removed from day-to-day realities Weak relationships between the shared service centre and local business

Answer 179

The use of external suppliers as a source of finished products, components or services once previously provided in-house. Outsourcing can enhance quality and reduce cost by using an expert to carry out the activity.

Answer 180

Firms competence in doing it themselves If risks are better managed by outsourcing Can it be assured and controlled The transfer and security of intellectual property The financial cost

Answer 181

Track record Quality of the relationship Strategic goals Financial stability

Answer 182

Mechanistic - rigid, bureaucratic and applicable to stable environments Organic - Fluid and applicable to changing environments

Answer 183

No traditional horizontal, vertical or external boundaries. Enables people to form relationships Always some hierarchy to avoid chaos

Answer 184

Both organisational structure and organic Through encouraged relationships between functions and extensive use of outsourcing, partnerships, joint ventures etc Lock in competitive advantage through relationships Task orientation and emphasises working together

Answer 185

Virtual teams - comprised of colleagues in disparate offices, collaborative function on a team via technology Virtual firm - no overly physical presences - can be online stores e.g. Amazon

Answer 186

Hollow organisation - all non-core activities are outsourced allowing focus on activities that add the most value Modular organisation - extends outsourcing to production of components for assembly by retained staff or employees just to coordinate fully contracted out services

Answer 187

core of essential executives and workers supported by outside contractors and part-time help. It is also known as a flexile firm

Answer 188

Professional core - perm staff Contractual fringe - external provider Flexible labour force - temp or part time workers Customers - enabled to execute some tasks on their own

Answer 189

The price at which one division in a group sells its products or services to another division in the same group.

Answer 190

Revenue centre Costs centre Profit centre Investment centre

Answer 191

Full cost (absorbed) Variable (marginal) cost Oppurtunity cost Full cost plus Negotiated prices Two-part transfer process Dual pricing

Answer 192

Can determine the profits of a division Which affects performance evaluation Determines taxes paid Adding incremental margins could influence the final sales price Dysfunctional decisions can be made - better from a market

Answer 193

How much the system costs to run Whether dysfunctional behaviour is introduced as managers seek to obtain bonuses Positioning of product based on price

Answer 194

The set of principles which govern the structure and determines objectives of an organisation and regulates the relationship between the organisation’s management, its board of directors and its shareholders.

Answer 195

Is a code of practice embodying a shareholder-led approach to corporate governance.

Answer 196

Leadership Division of responsibility Composition, succession and evaluation Audit, risk and control - need audit committee of 3 NEDs Remuneration

Answer 197

Remuneration committee

Answer 198

Accountability Supervision Direction Executive action Risk assessment and management

Answer 199

Promote awareness of cyber risks Security focus culture Transparency and accountability Improving IT environment Attract and retain skilled individuals

Answer 200

Accountability Stakeholders Openness and transparency Governance/broad structure Monitoring performance

Answer 201

For corporate governance in the UK public sector 1) Selflessness 2) Integrity 3) Objectivity 4) Accountability 5) Openness 6) Honesty 7) Leadership

Answer 202

Sales Profit Numbers and volumes Employee headcount

Answer 203

What a business can do to expand both internally or externally in the home country and abroad

Answer 204

Expansion of a firm’s size, profits, activities achieved without taking over other firms

Answer 205

Might be only sensible way to pursue genuine technological innovations If there is no suitable target for acquisition Planned and financed easily Maintain style of management and corporate culture Cheaper Less likely to have unforeseen losses

Answer 206

May intensify competition in market Too slow is market develops quickly Doesn't gain access to established knowledge and systems Lack economies of scale initially May be prohibitive barries

Answer 207

Chance Life cycle Competition Reduce dependence Variable quality

Answer 208

The mutual joining of two seperate companies to form a single company

Answer 209

The purchase of a controlling interest in another company

Answer 210

Speed of growth Economies of scale Synergies - relationship Risk-spreading (diversification) Overcome barriers to entry Outplay rivals

Answer 211

 Finding a suitable target  Cost  Strategic fit  Integration of processes  Integration of culture  Integration of systems  Risk of government intervention  Problems retaining key staff  Inadequate due diligence

Answer 212

Two or more organisations set up a third organisation or co-operate in some other structured manner to share control. This is very common in entering normally closed markets.

Answer 213

 They permit coverage of a larger number of countries since each one requires less investment  They can reduce the risk of government intervention  A joint venture with an indigenous firm provides local knowledge  They provide funds for expensive technology and research projects  Core competences, which are not available in one entity can be accessed from the other

Answer 214

 Major conflicts of interest over profit shares, amounts invested, the management of the joint venture, and the marketing strategy etc.  Problems in each party protecting intellectual property (not sharing)  Danger that a partner may seek to leave joint venture if its priorities change (e.g. shortage of funds) or it is acquired by another firm  Lack of management interest: The JV will be seen as a secondment outside of the main career hierarchy of the parent firms

Answer 215

A loose contractual relationship between two or more independent parties that seeks to achieve a common goal

Answer 216

A method of expanding the business on less capital than would otherwise be possible. It is essentially a ready-made ‘business in a box’.

Answer 217

Franchisor grants a licence Franchisee pays franchisor for subsequent goods as well as performance fee Franchisee runs and franchisor imposes quality control Franchisor provides support services

Answer 218

Rapid expansion and increasing market share Low financial risk Economies of scale are quickly available Income stream as well as initial capital

Answer 219

Can adopt brand name etc Additional help and training provided

Answer 220

Clash between local needs/market and strategy of franchisor Most successful may break away and set up independently

Answer 221

Franchisor will seek to maintain control Payment of royalties

Answer 222

Co-ordinate activities of different divisions and functions Help to secure finance Gain board approval Develop annual budget

Answer 223

Cover sheet Statement of purpose The business Financial data Supporting document

Answer 224

Description of the business Marketing Competition Operating procedures Personnel Business insurance Summary of financial data

Answer 225

Loan applications Capital equipment and supply list Break-even analysis Pro-forma projections: - detail by month, first year - detail by quarter, second and third years - basis of assumptions made Statement of financial position Pro-forma cash flow

Answer 226

Tax returns of the business and its owners Personal financial statement (if security has to be given on finance borrowed) Resumes of owners and senior managers Copies of any (where applicable): - franchise contracts - leases - licences - other legal documents - letters of intent from customers or suppliers

Answer 227

 Ensures financial resources are available or are raised in sufficient time, such as equity and loan capital.  Turns the strategy, and the functional strategies, into an overall financial budget.  Can assist with the setting and monitoring of financial and non-financial performance measures.  Can help with the establishment of priorities.  Assist in business modelling and scenario planning

Answer 228

To facilitate this, finance professionals become embedded in operations at lower and/or local levels, which provides a better level of overall support. Finance professionals can:  Provide other business units, departments and projects with real-time support.  Assist in the analysis of financial and non-financial performance data.  Help devise strategies to improve performance.  Review and challenge proposals before being read by senior management.  Collaborate in the preparation of departmental budgets and forecasts.  Assist in the development of information systems so necessary information is captured into the final design.

Answer 229

A strategic and coherent approach to the management of an organisation’s most valued assets: the people working there who individually and collectively contribute to the achievement of its objectives for sustainable competitive advantage

Answer 230

 Serve the interests of management rather than employees.  Provide a strategic approach to meeting staffing issues.  Link the business, its mission and its goals to HR strategies.  Enable human resource development to add value to products and services.  Gain employee’s commitment to the organisation’s values and goals.

Answer 231

- Recruitment - Training and retraining - Transfer and relocation - Redeployment - Redundancy - Productivity improvements - Morale management - Avoidable wastage reduction

Answer 232

Often associated with continuity of leadership Ensuring someone is ready and able to take place

Answer 233

 Increased development of existing managers, groomed for promotion and succession.  Shared responsibility with senior and line managers. It is not just HR’s sole responsibility to spot vulnerabilities in succession.  Objective assessment of current managerial talent is useful in resource audits and to identify training needed to close skills gaps.  Development of leadership teams, rather than a queue for top positions. This should ensure flexibility in skills to cover temporary gaps.

Answer 234

Selection Performance Appraisal Reward Training and development

Answer 235

Find improvements Find new products

Answer 236

Productivity improvements Quality management Planning and efficiency Operational processes

Answer 237

Leadership Culture People Structure Communication

Answer 238

Volume Variety Variation in demand Visibility

Answer 239

Level capacity - constant Chase demand - matched to forecast Demand management - Use price discrimination methods to manage Mixed - combo

Answer 240

An approach to planning and control based on the idea that goods or services should be produced only when they are ordered or needed. Also known as lean manufacturing.

Answer 241

Elimination of activities that do not add value Involvement of all staff Continuous improvement to processes (kaizen)

Answer 242

Focuses on the way a product or service in produced or delivered. Procedures and standards are devised with the aim of ensuring defects are eliminated

Answer 243

Is concerned with checking and reviewing work that has been done

Answer 244

Internal customers and suppliers Service level agreements Quality culture within the firm Empowerment

Answer 245

Price Quality Quantity Delivery

Answer 246

 Stronger relationship with the supplier  Possible source of superior quality due to increased opportunity for a supplier quality assurance programme  Facilitates better communication  Economies of scale  Facilitates confidentiality  Possible source of competitive advantage

Answer 247

 Vulnerable to any disruption in supply  Supplier power may increase if no alternative supplier  The supplier is vulnerable to shifts in order levels

Answer 248

 Access to a wide range of knowledge and expertise  Competition among suppliers may drive the price down  Supply failure by one supplier will cause minimal disruption

Answer 249

 Not easy to develop an effective quality assurance programme  Suppliers may display less commitment  Neglecting economies of scale

Answer 250

 Allows the utilisation of specialist external expertise  Frees-up internal staff for other tasks  The purchasing entity may be able to negotiate economies of scale

Answer 251

[] First tier supplier is in a powerful position  Competitors may utilise the same external organisation so unlikely to be a source of competitive advantage

Answer 252

Is the development of a true partnership between a company and a supplier of strategic value. The arrangement is usually long-term, single-source in nature and addresses not only the buying of parts, products, or services, but product design, quality and supplier capacity. Intergrated supply chain

Answer 253

The management process that identifies, anticipates and supplies customer requirements efficiently and profitably.

Answer 254

Generic strategy Product/Market (Ansoff) Orientation

Answer 255

Corporate, business and market strategy How do we compete in the market? What is it that we should do? What is our marketing plan?

Answer 256

Customer purchases Consumer uses it Can be the same person

Answer 257

Product orientation Production orientation Market orientation Sales orientation

Answer 258

The division of the market into separately identifiable sub-units to help target the marketing effort

Answer 259

Mass/undifferentiated - no seperate customer segments Niche/concentrated - one or two segments only Micro - tailored to individual needs

Answer 260

Identify new marketing opportunities Specialists can be used for major segments Marketing allocated proportionately and therefore maximise return on investment Make adjustments to the product Can try to dominate particular segments

Answer 261

Types of customer Location of customer Demographic factors Lifestyle Behavioural Contextual

Answer 262

if it is: Measurable Accessible Stable Substantial Defensible

Answer 263

The overall location of a product in a buyer’s mind in relation to other competing products, services or brands.

Answer 264

The systematic gathering, recording and analysing of information about problems relating to the marketing of goods and services. It is used to formulate the marketing mix.

Answer 265

The market Products Pricing Promotion Distribution

Answer 266

Defining problems Developing hypotheses Research Data collection Analysis and interpretation Conclusions and recommendations

Answer 267

The gathering and analysis of existing or secondary data. This may use existing company reports and other information from both internal and external sources, such as information gathered from customers via a store card.

Answer 268

The collection of new (primary) information direct from respondents. As such it is usually more expensive than desk research and so is only performed if desk research fails to answer all questions asked.

Answer 269

 Individual and group interviews.  Trial testing and focus groups.  Word association.  Observation of processes.  Questionnaires, which may include opinion scoring using net promoter methods

Answer 270

Name - legally protected Livery - designs, trademarks etc Association of personality - brand distinguish a product

Answer 271

Single company name Different brand names for each product Own branding

Answer 272

Cowboy - High price Low quality Premium - High Price High Quality Economy - Low price low quality Bargain - Low price high quality

Answer 273

The set of controllable marketing variables that a firm blend to produce the response it wants in the target market.

Answer 274

Both product and service: Product Place Promotion Price Service only: People Processes Physical evidence

Answer 275

Basic/core Actual Augmented - the whole package e.g. added extras

Answer 276

Local products International products Multinational products Global products

Answer 277

Direct - goes from producer to consumer Indirect - makes use of intermediary

Answer 278

Retailers Wholesalers Distributors and dealers Agents Franchisees

Answer 279

Distributor Sales agent Joint venture Own a local office

Answer 280

When consumers ask for the brand by name, inducing retailers or distributors to stock up with the company’s goods.

Answer 281

Is targeted on getting the company’s goods into the distribution network. This could be by giving a special discount on volume to ensure that wholesalers and retail customers stock up.

Answer 282

Above the line - customer sees Below the line - non-media e.g incentives

Answer 283

Communicating information Awareness of new products Highlighting USP Increasing sales and profits

Answer 284

Informative Persuasive Reminding

Answer 285

One-to-one basis

Answer 286

creation of positive attitudes regarding products, services, or companies

Answer 287

Costs Customers Competitors

Answer 288

Corporate objective

Answer 289

Discount pricing - Low price higher sales Parity pricing - Market benchmark Premium - High price lower sales

Answer 290

The measure of how far demand for a good will change in response to a change in its price.

Answer 291

% change in demand % change in price

Answer 292

Giffen goods - One that is consumed even with price increase because people have to pay it - petrol Veblen goods - Demand for goods rises as consumers perceive a higher price to make it more luxury

Answer 293

The setting of different prices for a similar product in different parts of the market. Also sometimes referred to as differential pricing.

Answer 294

Market segment Product version Place Time Dynamic

Answer 295

Market skimming - High price initially Penetration pricing - Low price to increase market share Promotional prices - Deals Everyday low prices - Aldi Product line pricing - Basic/deluxe version Captive product pricing - Inital loss for add ons Predatory pricing/dumpling -Drop price to push out competition Psychological pricing - appeals to desire Value pricing - pay what you think it is worth

Answer 296

Based on variable costs of production only. The contribution earned should cover the fixed costs (break-even) and beyond that, earn profit.

Answer 297

Fixed costs are absorbed into the cost of the product and a mark-up represents profit.

Answer 298

Increases the full cost as above with an amount of profit that represents the return on the assets used to make it.

Answer 299

 Simplicity of price setting  Control of sales discounting  Ease of budgeting  Easy to state rates of mark-ups in contracts with the government so profits are deemed fair and not excessive

Answer 300

 Ignores the effect of volumes on costs (under/over recovery on fixed costs)  Useless for very high fixed cost industries  May not suit positioning of the product – product could be undersold or overpriced  Ignores competitive conditions  Does not consider the implications for sales of other products made by the firm (a so-called loss leader approach)  Inherent problems in assessing costs  Invites poor cost control

Answer 301

People they employ Processes they follow Physical evidence the customer receives

Answer 302

A marketing mix that gets customers to buy a product or service and satisfies their needs, perhaps in a single sale, without building any sort of long-term relationship with them.

Answer 303

Management processes that seek to attract, maintain and enhance customer relationships by focusing on the whole satisfaction experiences by the customer when dealing with the firm.

Answer 304

Loyalty schemes Personalisation programmes Structural ties

Answer 305

People do not need the products, their production wastes resources Cause envy if not affordable Use pricing to be selective Benefits may be unrealistic

Answer 306

Changes in the environment Changes in the products the organisations in the working methods Changes in management and working relationships Post-acquisition

Answer 307

Scope Pace Manner

Answer 308

Incremental Transformational

Answer 309

Reactive or pro-active

Answer 310

Individual level - improving skill levels etc of individuals Organisation structure and systems level - situation in which people work Organisational climate and interpersonal style levels - develops trust, reduces negative effect of excessive social conflict

Answer 311

Forced change Transformational changes Step change

Answer 312

Unfreeze Move Refreeze

Answer 313

it is enforced without participation

Answer 314

Sometimes called a champion of change, or a group or external consultancy with the responsibility for driving and ‘selling’ the change.

Answer 315

 Defining the problem  Suggesting possible solutions  Selecting and implementing a solution  Gaining support from all involved

Answer 316

 Communication skills  Negotiation and ‘selling’ skills  An awareness of organisational ‘politics’  An understanding of the relevant processes

Answer 317

Reframe Restructure Revitalise Renewal

Answer 318

Physiological changes Circumstantial changes Psychological changes

Answer 319

Structural inertia - cumulative effect of all systems and procedures the organisation to ensure consistency Group inertia - block change that are inconsistent with team norms

Answer 320

Habit Security Effect on earnings Fear of the unknown Selective information processing

Answer 321

Weaken them

Answer 322

Strengthen

Answer 323

Stakeholders

Answer 324

A strategic control system

Answer 325

Perform strategic review Set strategic objectives - set milestones Set target achievement levels Monitor Reward

Answer 326

A plan expressed in financial terms Usually short term Sets milestones

Answer 327

 Promotes forward thinking in terms that potential problems and solutions are identified early.  Helps identify linked parts of the business and ensure that managers work together to achieve the desired joint outcomes.  Sets targets and motivates performance to achieve those targets.  Provides a basis of control by comparing actual results to the budget and determining the cause for any variance.  Provides a system of authorisation by allocating managers fixed funds and thereby the authority to spend.

Answer 328

 Buy in and adherence in respect of senior management  Accountability with clear responsibilities  Motivating targets that are challenging but achievable  An established system of regular data collection and reporting  Targeted reporting and short reporting periods that are timely  Creation of action – reporting variances and the causes of variances is not enough.

Answer 329

KPI's measure how well CSF are going

Answer 330

Encouragement of short-termist behaviour Ignores strategic goals Cant control people without budget responsibility Historic measures Distortability - manipulation

Answer 331

Financial perspective Customer perspective Internal Business perspective Innovation and learning

Answer 332

Conflicting measures Selecting measures Interpretation and expertise

Answer 333

Economy x Efficiency = Effectiveness

Answer 334

 Sales revenue  Market share  Profitability  Number of units  Number of employees  Number of customers  Number of countries in which the business operates

Answer 335

 Year on year increase  Gross profit margin  Net profit margin  Mark up applied  ROCE/RI

Answer 336

 Working capital cycle: – Inventory days – Receivable days – Payable days  Current ratio  Gearing ratio  Interest cover

Answer 337

Profit for the period ----------------------------- x 100 Average capital employed during the period

Answer 338

 It enables comparisons to be made between projects and divisions of different sizes.  It is readily understood by management as it’s a simple formula.  It is cheap and easy to calculate given that information is readily available.  If all divisions are hitting the same ROCE, the group will also as a whole.

Answer 339

Divisional profit - (net assets of division x required rate of return)

Answer 340

It is conceptually more complicated You cannot easily compare differently sizes divisions

Answer 341

Short-termist Discourage of investment in assets meaning Continues with shabby assets Assets are patched not replaced Managers choose inappropriately outsource asset-intensive operations

Answer 342

the inability to predict the outcome from an activity due to a lack of information.

Answer 343

the ability to quantify the chance of something happening, perhaps by using past data as a guide.

Answer 344

Downside risk - possibility the outcome is worse than expected Upside risk - possibility it could be better than expected

Answer 345

the process of identifying and assessing (analysing and evaluating) risks and the development, implementation and monitoring of a strategy to respond to those risks.

Answer 346

Involves the selection, implementation, monitoring and review of suitable risk treatments for each risk identified.

Answer 347

1) Establish risk management group and set goals 2) Identify risk areas 3) Understand and assess scale of risk 4) Develop risk response strategy 5) Implement strategy and allocate resources 6) Implementation and monitoring of controls 7) Review and refine process and do it again

Answer 348

 A description of the risk and how it arises (its scope).  A categorisation of the nature of the risk.  The parties affected by the risk.  Quantification of the risk (likelihood and impact).  Tolerance or appetite for the risk.  Risk treatment and control (how it is managed at present and what will be done if it manifests).  Potential action to further reduce the risk.

Answer 349

Defenders - Prefer low risk, secure markets, and tried and tested solutions. Decision making formulised. Prospectors - Prefer results, being entrepreneurial and pro active. Happy to take risks Analysers - Core of stable products and markets. Will consider moves into new markets carefully. Likely to follow change not initiate. Reactors - No consistently defined strategy but muddle through. Oblivious to risk.

Answer 350

 Expectations of shareholders  Organisational attitudes  National origin of the organisation  Regulatory framework  Nature of ownership  Personal views of managers

Answer 351

External and internal factors (PESTEL + Porter's Five Forces) Activities and processes, relevant policies and procedures Culture within the organisation Potential for unexpected outside events

Answer 352

Strategic risk Operational risk Hazard risk Financial risk Compliance risks Business risks Cyber risks

Answer 353

Associated with the longer-term strategic objectives and the potential variability of returns as a result of corporate strategy and its strategic positioning. External environmental analysis should be a good way of determining these.

Answer 354

One that arises from day-to-day activities

Answer 355

The exposure to natural events, the actions of employees and disastrous events affecting key stakeholders such as customers and suppliers.

Answer 356

Gearing, Exposure to credit, Liquidity, Interest rates, Exchange rates and so on.

Answer 357

Caused by general fluctuations in financial results

Answer 358

Potential to fail to comply with las or regs

Answer 359

Can be split into 3 Reliance Misuse Unauthorised access

Answer 360

Control or reduce

Answer 361

Avoid or abandon

Answer 362

Transfer - e.g. get insurance

Answer 363

Retain or accept

Answer 364

 Corporate codes of conduct  Environmental policies  Health and Safety policies  Financial controls  Information systems controls and cyber security measures  Personnel controls  Internal audit processes

Answer 365

Disclose in the accounts - The existence of a process for managing risks - How the board has reviewed the effectiveness of the process - The process accords with Turnbull guidance

Answer 366

Acknowledgement that the board is responsible for the company's system System is designed to manage rather than eliminate Summary of the process used by Directors to review Information about weaknesses

Answer 367

 Litigation from persons affected by an activity of the organisation and/or its staff  Fines from regulatory bodies  Loss of assets due to theft or damage  Costs of rectification of errors  Revenues lost due to breakdowns  Loss of reputation  Loss of faith in management

Answer 368

The process through which a business details how and when it will recover and restore operations interrupted by the occurrence of a rare, but massive, risk event.

Answer 369

 Securing interim management and staff.  Replacement of lost inventory.  Restoration of IT systems and data.  Obtaining premises used during recovery.  Management of PR issues.

Answer 370

Incremental and avoidable cashflows Cashflow has not already been incurred (sunk costs) Revenue or cost must be a cash flow

Answer 371

A type of relevant cash flow Includes lost revenue and associated variable costs that will not be earned/incurred as a result of pursuing the proposal

Answer 372

Total fixed costs Contribution per unit

Answer 373

Planned sales - breakeven sales Planned sales

Answer 374

Total fixed costs + Target profit Contribution per unit

Answer 375

Break-even assumes that revenue and variable costs change proportionally with volume Some fixed costs are stepped fixed costs May be hard to attribute which costs are attributable to products being manufactured

Answer 376

Changing the value of one variable in order to test its impact

Answer 377

Can test a range of possible analysis

Answer 378

Number of ways of achieving desired result/ Total number of possible outcomes

Answer 379

Occurrence of one excludes the other

Answer 380

One outcome doesn't effect the other

Answer 381

Long run average (Outcome * probability) Average of all

Answer 382

Can be inaccurate as all dependent on the probability workings Long-term averages so not useful in one-off decisions Can only be a guide Does not consider risk Time value of money is not taken into consideration

Answer 383

All possible choices

Answer 384

All possible outcomes

Answer 385

(a) As with expected values, everything to do with probability and outcome will be an estimate and therefore potentially subjective and unreliable. (b) Decisions trees only consider the financial outcomes being assessed. There may be other financial or non-financial benefits of choices such as reduction of carbon miles, avoidance of relocating or firing/hiring staff, reputational enhancements or completion of product portfolios.

Answer 386

Plotting monthly revenue and cost information Forecasting

Answer 387

Coefficient of variation = standard deviation ----------------------------- x 100 mean

Answer 388

Shows the amount of variability in a data set

Answer 389

It shows the % of data that falls within a standard deviation of the mean

Answer 390

An assessment of the relationship between two or more variables. One of these variables is the dependent variable, whose value depends on the independent variable(s).

Answer 391

A measurement of the extent to which changes in the dependent variable are explained by changes in the independent variable.

Answer 392

A statistical measure of the strength of the relationship between the relative movements of two variables. It takes a value between -1 and +1 and the closer the value is to -1 or +1, the stronger the relationship. The closer the value is to 0, the less of a relationship there is between the two values.

Answer 393

Selection bias Self-selection bias Observer bias Omitted variable bias Cognitive bias Confirmation bias Survivorship bias

Answer 394

The strategy specifying who in the organisation controls and uses the technology provided.

Answer 395

The hardware systems that enables the use of information to support the business strategy.

Answer 396

The combination of hardware, software and telecommunications that delivers on the information management strategy.

Answer 397

Revenue opportunities Cost reduction Enhanced services Improved decision making

Answer 398

Risk of inadequacy Risk of breakdown Risk of excess expense

Answer 399

Analysis Design Programming Testing Conversion Implementation

Answer 400

Human threats e.g. hackers Fraud Deliberate sabotage Denial of service attacks

Answer 401

Natural threats e.g. floods Integrity - incorrect entry Non-compliance - data protection Accidents - human caused damage

Answer 402

Prevention Detection Deterrence Recovery Correction Avoidance

Answer 403

Multiple sets of large volumes of data

Answer 404

Volume Velocity - speed it is collected Variety Veracity - Truthfulness of data

Answer 405

Anything that can be recorded in a table

Answer 406

Comprises of visual and audio data and unstructured text such as emails, texts

Answer 407

The process of collecting, organising and analysing large sets of data to discover patterns and other information for use in business decisions.

Answer 408

Essentially, a single database into which data is loaded in a standardised format for the purpose of data mining.

Answer 409

The process of identifying patterns and relationships within and between different sets of data. In essence, it turns raw data into useful information.

Answer 410

Access to skills to use the data Robust security measures Financial resources Who owns the data

Answer 411

Latest buzzword - does it really tell you anything you didn't already know Correlation and causation - tells you what has happened by not why Data overload Sustainable competitive advantage Representative data

Answer 412

Reduce costs by increasing efficiencies Through automation or intelligent systems

Answer 413

Associated redundancy costs Ethical considerations

Answer 414

One that uses the internet for part of its function

Answer 415

System of interrelated computing devices

Answer 416

One not held in a physical form eg audio and images

Answer 417

 Secure access through the cloud.  Search facilities.  Version control.

Answer 418

The company knows it has, recorded and stored on a server

Answer 419

Info held in someones head or not formally documented

Answer 420

If it is suitable to increased security

Answer 421

Objectivity Integrity Confidentiality Professional behaviour Professional competence and due care

Answer 422

Self interest Intimidation Familiarity Advocacy Self review

Answer 423

Trust that stakeholders place in a business which allows to exceed in the market

Answer 424

the ability to ‘meet the needs of the present without compromising the ability of future generations to meet their own needs’ (the Brundtland Report).

Answer 425

the process by which we achieve sustainability.

Answer 426

A company, institution or entity that generates continuously increasing stakeholder value through the application of sustainable practices

Answer 427

Environmental Social Governance

Answer 428

If a revenue stream is ethical/sustainable Pressure groups causing movements towards sustainable materials Fairness of labour contracts Privacy of customers and employees Terms of trade with suppliers Prices to customers Managing cross cultural businesses

Answer 429

Identify issue Set targets Monitor progress Report to stakeholders

Answer 430

World setter in sustainability reporting and issued standards to report on economic, environmental and social matters.

Answer 431

The strategic actions, activities and obligations of business in achieving sustainability.

Answer 432

Proactive Reactive Defence Accommodating - need encouragement and avoid government intervention

Answer 433

Wastes resources by making things people don't need and using marketing to convince them they do

Answer 434

Value judgements are opinions -one say they don't need another says they do Increased employment opportunity Proper target marketing may reduce waste Ethical marketing - promotes alternative more responsible choices

Answer 435

Product issues - dangerous but still sold - alcohol Price issues - products priced to maximise returns Promotion issues - Conditioned to accept or become offended by campaigns Place issues- encouraging or denying access

Answer 436

Ensuring they do not cause hard E.g animal testing

Answer 437

Looking for ethical suppliers

Answer 438

Using to target customers to increase sales Some companies sell on the data to other entities Hard to show who owns the data