L4M1 Flashcards
L4M1
What is corporate governance?
The mechanism, procedures and processes that are used to control and direct an organisation
What are the common functions that can be structured as shared services?
Shared services are a form of centralised structure often used in hybrid structures. Common functions are: HR Procurement ICT Finance Administration
What are the main differences between the public, private and third sector?
The public sector is owned by the Government and aims to provide services; is financed through the state -tax payer; achieve defined service levels ( healthcare, education, military, emergency services)
The private sector is owned by and controlled by investors, funded by investment, revenue and debt (loans) and aims to make profit for stakeholders ( hospitality, services, supermarkets, online retailers)
The third sector, often referred to as TSO’s exists to support and promote social, environmental or cultural objectives. Voluntary or not for profit organisations. (Charities, trade unions, professional associations, CIPS)
How can a strong brand identity add value?
The brand is the image of an organisation. The logo, name, slogan, colour that differentiate it from the competition.
A well-known brand may entice customers to buy the organisation’s products in preference to thoes of the competitors.
Added value comes from awareness (will be instantly recognisable) engagement (adverts) communication (latest development or offers)
What should a Procurement professional consider when sourcing a capital purchase?
Capital purchase is a CAPEX type of spend. It is of high value and depreciates over time and its usually purchased using a loan. Stakeholders need to be consulted.
Consideration should be given to the Total Cost of Ownership ( purchase price, specification, quality, installation costs, spares, maintenance, insurance, decommissioning, disposal)
What are the stages of procurement cycle process?
1 Understand the need and create a high level specification 2 Market analysis ( make or buy decision) 3 Develop strategy plan 4 Pre procurement market engagement 5 Develop documentation 6 Select suppliers to participate to ITT/ RFQ 7 Issue ITT / RFQ 8 Evaluate ITT / RFQ 9 Contract award and implementation 10 Warehouse/ logistics/ receipt 11 Contract performance 12 SCM / SRM development 13 Asset management and lessons learned
What are the 4 questions used to identify potential conflict of interest?
A situation where a person has opposing loyalists.
- Will I gain financially in addition to my salary?
- Do I have any personal relationship with colleagues or suppliers?
- Am I doing an identical role for a competitor?
- Shouls I disclose any of my concerns?
Remember: disclose | distance | delegate | disassociate
What is the difference between economic and industrial classifications?
There are 3 sectors within economic: public (owned by the government), private ( owned and funded by individuals or enterprises), third ( voluntary or non for profit)
There are 3 industrial sectors: primary (extraction of raw materials), secondary ( raw materials onto finished products), tertiary ( provides a service and supports the other 2 sectors)
Cost does not have to be monetary
Can be made up of: Time Material Effort Opportunity
Fixed costs of an organisation do not change.
Variable cost do change as they are linked to the output of the business.
Fixed costs: the organisation has to pay them no matter how well or how badly it is performing ( salaries, insurance, rent)
Variable costs: relate to the number of goods produced or sold, or the number of services supplied ( raw materials, haulage costs, wages for hourly paid workers)
