Management Activities: Planning, Organising, and Controlling

Question 1

Effective Plans are SMART

Answer 1

Specific, Measurable, Agreed, Realistic, Timing

Question 2

Specific

Answer 2

Very clear and specific aims. Everybody understands exactly where the business is going and there is no confusion in the direction the business is headed. Example: To be the market leader in soft drink distribution in Ireland for Coca-Cola is a specific aim.

Question 3

Measurable

Answer 3

The target set can be evaluated- are we successful or not. In the business world you cannot afford to be making losses so you need to have measurable plans in place. Example: Coca Cola examine statistics against the industry average to analyse business performance.

Question 4

Agreeable

Answer 4

All members of staff support the plan and so everybody involved is moving in the same direction. Performance Appraisal for hitting targets will help support this. Example: Coca- Cola outline their targets to staff at the beginning of the year.

Question 5

Realistic

Answer 5

Objectives and targets that are too difficult to reach can de-motivate your staff if there is only a small chance that you can be successful. Example: Coca-Cola ask their sales team to try and get 10 new clients in Ireland to sell their products in each county over the next month, rather than 100.

Question 6

Timing

Answer 6

Setting a clear time frame for achieving your goals are important. Plans should not be open ended as this can cause delays for decisions.
The example used in this question has a clear timeframe for the business to establish whether their goal has been met.

Question 7

Steps in the Planning Process

Answer 7

1. Assess your current situation
2. Set your goal
3. Decide your plan
4. Implement your plan
5. Review the plan

Question 8

SWOT Analysis

Answer 8

It is used to evaluate/analyse a business when devising strategy or making a plan.
It stands for strength, weaknesses, oppertunities, and threats.

Question 9

Set a Goal

Answer 9

This is a visionary statement outlining who the business is, what the business does and where the business is going, containing the business’ values. It is the businesses most important goal.

Question 10

Decide your Plan

Answer 10

To incorporate the mission statement, a business can put into place different types of plans.

Question 11

Implement the Plan

Answer 11

Management choses to put the plan in place and discusses with staff clearly. The goal is for everyone to buy into the plan

Question 12

Review the Plan

Answer 12

Regular meetings take place to review the plan and take action if needed.

Question 13

Strategic Plans

Answer 13

This is long term planning covering a period of five years or more. It is usually drawn up by senior management and it outlines how the long term goals of the firm are to be achieved. Ideas are taken from the Mission Statement for them. It is important as it gives a long term picture and focus to work towards. The general outline is 1-5 years.
Example: An Irish start up may wish to expand to the UK market in the next 5 years and gain a 10 % market share over there

Question 14

Tactical Plans

Answer 14

This is short-term planning which breaks the strategic plan into shorter more manageable periods, generally 1-2 years which is important as it helps the business achieve the strategic plan. It is usually drawn up by middle management.
Example: The Irish start up deploys UK agents in different parts of the UK to speak to retailers about distributing their products.

Question 15

Operational Plan

Answer 15

This is the planning for the day-day running of the business, for example the annual marketing plan.
Example: The start-up creates a website or Facebook page to advertise its products and services.

Question 16

Contingency Plans

Answer 16

This is back-up planning to cope with emergencies/ unforeseen events and unexpected circumstances. It is important to prevent disruptions to business and thereby prevents potential loss of profits and possible business collapse.
Example: Putting capital aside to set up more chains in Ireland if it becomes impossible to sell your product in the UK market at this time.

Question 17

Manpower planning

Answer 17

This would involve having the right people with the right skills in the right place throughout the business. It involves doing a human resource audit and estimating future human resource needs.
Example: An Irish start up having the right number of staff to meet demand when business is booming and satisfy customer needs.

Question 18

Financial Plans

Answer 18

This would involve preparing financial statements like Cash Flow Forecasts to predict the amount of income they will take in and expenditure they may have over a particular period of time.
Example: An Irish start-up will use their Cash Flow Forecasts when acquiring a loan in the bank to generate income.

Question 19

Organising

Answer 19

Organising involves a considered use of resources, so as to best achieve a firm’s objectives. It involves building an organisational structure for the business. This puts a specific shape on the business and helps to co-ordinate its activities.

Question 20

Types of Organisational Structure

Answer 20

Functional structure, Product Structure, Geographical structure, Matrix or Team structure

Question 21

Functional Organisational Structure

Answer 21

The most popular structure with departments organised on the basis of who does what. All staff who do the same job are put in the same department.

Question 22

Product Structure

Answer 22

A product structure divides business operations on the basis of the products that it sells.

Question 23

Geographic Structure

Answer 23

This is where the business divisions are based in geographic locations, rather than the products produced.

Question 24

Matrix Structure

Answer 24

A matrix type of organisational structure combines the traditional departments seen in functional structures with project teams. In a matrix structure, individuals work across teams and projects as well as within their own department or function.
For example, a project or task team established to develop a new product might include engineers and design specialists as well as those with marketing, financial, personnel and production skills.

Question 25

Chain of Command

Answer 25

Clear lines of authority exist and employees know who to report to.
There is a person in charge of each department, which improves coordination, as employees know what is expected of them and when. There is accountability as someone is responsible for each section.

Question 26

Span of Control

Answer 26

Span of Control refers to the number of employees / subordinates that report directly to one manager/ supervisor in a hierarchy.

Question 27

Wide span of control

Answer 27

A wide span of control is when a manager is responsible for a large number of departments.

Question 28

Narrow span of control

Answer 28

A narrow span of control is when the manager has responsibility for a smaller group of employees. It is suited to jobs where close supervision is required.

Question 29

Factors affecting Span of Control

Answer 29

Trust, Type of Job, Skills of Workers,

Question 30

Trust

Answer 30

If there is greater trust placed in staff, there tends to be a wide span of control. If there is little trust, there tends to be a narrow span of control

Question 31

Type of Job

Answer 31

Employees who perform routine tasks require less supervision, therefore management can use a wide span of control. Highly skilled work may need greater supervision and so a narrow span of control.

Question 32

Skills of Workers

Answer 32

Workers with a lot of skills and experience may be able to work freely at their duties and so have a wide span of control. Worker with few skills and no experience will need a narrow span of control.

Question 33

Delayering

Answer 33

Delayering involves removing one or more levels of hirearchy from an organisational structure.

Question 34

Controlling

Answer 34

The control process involves comparing outcomes or results with the original plans and measuring performance.

Question 35

Stock Control

Answer 35

Stock Control is concerned with keeping optimum stock levels so that it doesn’t have too much stock or too little stock. Optimum stock levels lead to efficiencies because you have the right stock, in the right place, at the right time to meet production requirements and satisfy consumer demand.

Question 36

Stock Take

Answer 36

This is when employees physically count and record all stock in the business and compared to what is recorded on the business computer system. Any differences are identified for things like wastage or theft

Question 37

Electronic Data Interchange

Answer 37

We have already learned that EDI allows firms to communicate information such as orders, invoices, and payments electronically rather than paper.
This helps to:
Lower costs- example staff costs reduced, goods not going past usage date
Lead times- easier to track stock in real time
Quicker reorders- very few instances of stock shortages

Question 38

Just in Time

Answer 38

There are costs associated with overstocking and understocking and so some businesses will use the Just in Time System. This will mean that deliveries will arrive just as they are needed and in time for consumers. This will help to reduce costs such as storage and insurance for the business.

Question 39

Quality Control

Answer 39

Quality Control is concerned with checking/reviewing/inspecting work done to ensure it meets the required standards.
With a good control system, consistently high quality products are being sold, resulting in repeat purchasing and consumer loyalty, cost savings, and a great reputation in the market place.

Question 40

Focus on TQM

Answer 40

TQM is a management strategy designed to ensure 100% perfection and 100% customer satisfaction. It says that every person in the business is responsible for delivering quality to the customer. If a business follows the TQM principle, it will have perfect quality products.

Question 41

Regular Inspections

Answer 41

Regular checks of products to ensure that standards are being met. Raw materials such as food will often have to be checked by kitchens before serving to customers.

Question 42

Staff Training

Answer 42

Many times staff are the contact with customers and so it is important that they are correctly trained in the high quality standards and maintain their skill levels.

Question 43

Quality Awards

Answer 43

These are awards given by independent organisations to a business when they achieve a particular quality standard. Examples include the Q Mark, Bord Bia Quality Mark, and the ISO 9000 Series.

Question 44

Credit Control

Answer 44

Buying on credit means Buy Now and Pay Later and credit control deals with your debtors and creditors. The debtors are people that owe you money and creditors are the people you owe money to.

Question 45

Financial Control

Answer 45

Financial control for the business aims to ensure the business is keeping proper financial control and is profitable. A business that does not have proper financial control could risk losses and eventual closure. Tools such as Ratios and Cash Flow Forecasts will allow the business to manage finance correctly.