Performance And Costs To Aid Value Flashcards
What are the types of Orgnisational Control?
-Unitary Organisation (chains or franchises)
-Simple/Entrepreneurial organisation (know customers, add value, know responsibilities and deal with change)
-Multi Divisional Organisation (many different areas of business e.g design, manufacture, logistics)
What are the types of Divisions/Teams?
-Functional/Role
-Customer
-Process
-Geographical
What is a functional role?
Team that does a speciific role, so expertise is in one place and facilitate control (e.g finance, it dept, HR)
What is a customer based team?
Teams who look after customer groups, such as large customer accounts or sales (to understand and meet differing needs)
What is a process team?
A team that ensures coordination, and pool expertise, creating clear cost and profit centres. (E.g Logistics, Assembly)
What is a Geographical team?
A team that can cope with diversity and create its own profit or investment centres (e.g Area/region or country)
What are the advantages of extra divisionalisation?
-Greater motivation for managers
-Quicker decision making as no chain of command
-Better quality decisions (local and expert knowledge)
-Easier to hold people accountable and responsible for decisions/perfromance
What are disadvantages of extra divisionalisation?
-increased costs due to duplication of activities, harder to control multiple departments/areas
-loss of integration and ownership of service as and customers
-potential for lack of goal congruence if divisional interests differ
-Increased costs to recruit expert and highly skilled managers
What are the 4 types of responsibilty centres?
-Cost Centre (manager only responsible for costs under their control, stay in budget, maximise outputs and minimise costs)
-Revenue Centre (manager responsible for revenues earned, to achieve budgeted sales and maximise sales revenue)
-Profit Centre (Manager responsible for costs and revenues of their area, need to maximise profits and achieve budgeted profits)
-Investment Centre (Manager responsible for both profits and capital employed in their area, achieve target rates, maximise rate of profit)
What are the evaluation measures of Responsibility measures?
-cost
-Revenue
-Profit
-Profitability
-Balanced Scorecard (Financial, Internal Business, Customer, Imnovation and Learning)
What are some features of good team leadership?
-high team morale/low turnover
-Team takes responsibility for tasks
-team do tasks well
-Team can work without prescence of manager
What are features of bad team leadership?
-Tasks done badly or undone
-Low morale/high turnover
-Confusion and conflict over roles
-Team can only work well if manager present
What are the types of Leadership Styles?
-Autocratic/Telling
-Selling/Communication
-Participative/Consultative
-Delegating/Free - rein
What are some motivational methods for leadership?
-Surpervision and leadership
-Payment systems
-Personal progression and career management
-Explain goals and set performance measures
-Improved job design and empowerment
How does salary improve motivation?
+Attracts good staff
+Motivates career progression
+Predictable costs
-No incentive to perform well
-Leads to inflexibile behaviour (people dont want to do work they believe is suitable for pay they have)
-Increases fixed costs of firms
How does profit related bonuses improve motivation?
+gives incentive to work harder
+promotes flexible behaviour
+Enables staff to feel they part of success of business
-some staff dont have roles where they can influence profits
-leads to staff criticism of management decisions/conflict
-Can lead to short termist action to boost profits which damage business long term
How does equity based rewards motivate people?
+Encourages more long term effort
+No cost to the business
+Enables staff to adopt similar vidws to investors
-Dilutes shareholders who paid equity
-Many staff dont see link between efforts and the share price
-longer term share values not understood by or motivated by shares
