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BU5030-Managing Finance In A Digital World > Finance Structure > Flashcards

Finance Structure Flashcards

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1
Q

What is the Mintzberg Structure and how is it set out?

A 
Ideology
Middle line
Operating core
Techno structure (left oval)
Support Staff (right oval)
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2
Q

What Are Mintzberg’s 6 co-ordinating mechanisms?

A

Mutual Adjustment- co-ordination through informal contact
Direct supervision- co-ordination through formal hierarchy
Standardisation of work processes- standardisation of processes and operating procedures
Standardisation of outputs- product and service specifications
Standardisation of skills and knowledge- identify training needs and the skills base needed to do the work
Standardisation of norms- cultural norms and expectations

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3
Q

What is the entrepreneurial structure?

A

Entrepreneur - Employees

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4
Q

What is the functional structure?

A

Board of directors

Marketing - production - finance- HR

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5
Q

What is the divisional structure?

A

Board of directors
Division 1 - Division 2 - Division 3
Functions

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6
Q

What does a longer scalar chain have?

A

Many levels of management

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7
Q

What does a short scalar chain have?

A

Few levels of management

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8
Q

Centralisation has?

A

Upper levels of the company’s hierarchy have authority to make decisions

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9
Q

Decentralisation has?

A

The authority passed down to people at lower levels enabling them to make decisions

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10
Q

Advantages of decentralisation

A
  • Senior management free to concentrate of strategy
  • Better local decisions due to local expertise
  • Better motivation due to increased empowerment of employees and a more defined career path
  • Quicker responses and flexibility due to increased autonomy
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11
Q

What factors affect the amount of centralisation?

A
  • Management style
  • Ability of management and employees
  • Geographical spread
  • Size of the organisation
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12
Q

What is a stakeholder?

A

Anyone who has an individual or collective that has an interest or is concerned with the actions of a business to an extent where they may be affected by it or they may be able to influence it

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13
Q

Name some internal stakeholders

A

Employees
Managers
Shareholders

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14
Q

Name some connected stakeholders

A

Distributors

Stockholders

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15
Q

Name some external stakeholders

A 
Government
Media
Environmentalists
Local Communities
Competitors
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16
Q

What is Mendelows Power matrix index?

A

(Low level of power and interest)Minimal effort
(high level of interest and low level of power) Keep informed
(High level of power, low level of interest) Keep Satisfied
(high level of power and interest) Key players

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17
Q

What is the definition of ethics and business ethics?

A

Ethics is the system of moral principals that examine the concept of right and wrong.
Business ethics is the application of ethical values to business behaviour

18
Q

What are the fundamental principals of Ethics?

A
  • Integrity
  • Objectivity
  • Professional competence and due care
  • Confidentiality
  • Professional behaviour
19
Q

What are some examples of ethical behaviour?

A 
Paying staff good wages and pensions 
Good working conditions 
Paying suppliers within the agreed terms
Sourcing suppliers carefully
Using sustainable and renewable resources
Being open and honest with customers
20
Q

What is CSR?

A

The idea that a company should be sensitive to the needs and wants of all stakeholders and not just shareholders.

21
Q

What are somer examples of CSR?

A 
Environmental impact
Health impact of consumers
Fair treatment of employees
Wether animal testing should be done 
Safety of products and the production process
22
Q

What is corporate Governance?

A

The set of processes and policies that control, direct and administer a company

23
Q

What are the two basic accounting assumptions?

A

Does it have a monetary unit?

Economic entity- boundary between owners providing resources and doing business

24
Q

What is agency theory?

A

Maximise shareholder wealth

Done by owners being separated from day-to-day management

25
Q

What is the accounting equation?

A 
Resources = Related to creditors + related to owners
Assets = Liabilities + Capital
26
Q

What is an agent in the agency theory?

A

The agent represents another person or party (principal) in day-to-day transactions

27
Q

What is a problem with the agency theory?

A

Conflict of interest between the agent (management) and the principal (business owner)

28
Q

What is the hierarchical finance structure?

A

Triangle:
Bottom broad base: finance workers operational work reporting further up the chain
Middle: Narrow set of management level finance workers
Top: Very small group of senior finance staff

29
Q

What is the evolution of traditional shape to todays digital age shape?

A

Traditional is triangle today’s shape is diamond

30
Q

What is the diamond shape?

A

Lower Level assembly & processing tasks now being
carried out by technology rather than professionals
2. Finance Prof. works as part of a multi-disciplinary team offering higher valued services
3. Collaborative finance leadership approach, CFO & other senior finance staff working alongside with the CEO

31
Q

What are the parts of the diamond shape finance function?

A

Senior finance team: leading and organisational impact
Strategic business partnering: work with internal and external stakeholders to create and preserve value
Digital centres of excellence: Specialist make further insight into value creation and preservation specific specialist areas
Smart Finance “Factories”: Assemble an extract data to provide information

32
Q

What does the evolution to diamond shape show?

A

Increases emphases on professional level roles required to support management
Continued emphasis on specialist knowledge (Automation, technology) leading to the formation of multi-disciplinary teams who will become members of the finance team

33
Q

Which parties are interested in financial information and why?

A

Owners- interested in profitability and how well it is being run
Managers- interested in financial situation so that they can plan effectively
Banks- may wish to whether the business can afford repayments
Employees- interested in financial position and how it will affect job Security and wages
Suppliers and customers-check financial stability to be able to make payments and supply goods as needed
Government- Check that they are obeying relevant laws and reporting and taxation

34
Q

What is management accounting?

A

The provision of informations to help managers and other internal users in their decision making, performance measurement, planning and control

35
Q

What is treasury management?

A

Management of the funds of a business, namely cash and other working capital items, plus long-term investments, short-term and long-term debt and equity finance

36
Q

What is internal audit?

A

An independent activity, established by management to examine and evaluate the organisations risk management processes and system of control, and to make recommendations for the achievements of company objectives

37
Q

What are the level 3 specialist areas?

Digital centre of excellence

A

Financial planning and analysis
Taxation
Project management
Project appraisal

38
Q

What are the level 2 specialist areas?

Strategic business partnering

A

Communicating insight to influence users

Business partnering

39
Q

What are level 1 senior finance team roles?

A

Strategic leadership

40
Q

What are the level 4 key role areas?

A

Financial reporting
Management accounting
Treasury management
Internal audit

41
Q

What is the 5A framework?

A

The basic activities that finance professionals perform are the 5As – assemble, analyse, advise, apply and acumen.

BU5030-Managing Finance In A Digital World (6 decks)

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