Lecture 1 MANAGEMENT INFORMATION Flashcards
What is the role of a Manager in an organization?
Involved in decision-making processes, planning, and controlling the organization’s activities.
What is the purpose of Management Information?
To help managers manage resources efficiently and effectively by planning and controlling operations and allowing informed decision-making.
What are the two main components of Planning?
- Establishing Objectives
- Selecting appropriate strategies to achieve those objectives
Define an Objective.
The aim or goal of an organization (or an individual).
What is a Strategy?
A possible course of action that might enable an organization or individual to achieve its objectives.
What is Long-term Strategic Planning?
Also known as corporate planning, it involves selecting appropriate strategies to prepare a long-term plan to attain objectives, usually exceeding 2 years.
What is Short-term Tactical Planning?
Converts the corporate plan into a series of short-term plans, usually covering one year, relating to sections or departments.
What are the two stages in the Control Process?
- Comparing the performance of the organization with the operational plan
- Reviewing the Corporate Plan based on performance comparisons
Management is primarily focused on what?
Decision making.
List the qualities of Good Management Information.
- Accurate
- Complete
- Cost effective
- User Targeted
- Relevant
- Authoritative
- Timely
- Easy to Use
What are Internal Sources of Management Information?
Information that comes from within the organization, such as financial accounting records and personnel records.
What are External Sources of Management Information?
Information that comes from outside the organization, like consumer price index statistics and health and safety legislation.
What is Financial Accounting?
The classification and recording of monetary transactions and the presentation of results to assess performance over a period.
What is Management Accounting?
Involves professional knowledge in the preparation and presentation of information to assist management in planning and decision making.
What is a key difference between Financial Accounts and Management Accounts?
- Financial Accounts: Required by law for limited companies, mainly historical records, prepared for external reporting.
- Management Accounts: Not mandatory, focused on future results and prepared for internal use only.
What is the role of an Accounting Technician in a Cost Accounting System?
- Disclose profitable and unprofitable activities
- Identify waste and inefficiencies
- Analyze movements in profit
- Estimate and fix selling prices
- Value stocks
- Develop budgets and standards
- Evaluate the cost effects of policy decisions
- Highlight areas of variances
What does Cost Accounting involve?
- Preparing Statements (e.g. budgets, costing)
- Cost data collection
- Applying costs to inventory, products, and services
What are the aims of Cost Accounts?
- The cost of goods produced or services provided
- The cost of a department or work section
- What revenues have made
- The profitability of a product, service, department, or organization as a whole.
