Planning, organising and controlling- C8

Question 1

wHAT IS PLANNING?

Answer 1

Planning involves the manager setting goals for the business to achieve in the future and then comes up with a strategy to achieve these goals.

Question 2

What are the steps involved in planning?

Answer 2

Analyse the current situation using a SWOT analysis.
Set objectives for the future- something it would like to achieve
Create a plan-
Set a timeline- when to achieve goals
Review the plan- check progress so corrective action can be taken in needed

Question 3

What is SWOT analysis?

Answer 3

A SWOT analysis is a study of a situation, which identifies its strengths and weaknesses, and the opportunities and threats facing it. A business should carry out a SWOT analysis before drawing up any plans.

Question 4

What are the principles of a good plan?

Answer 4

SMART
-Specific- aims should be clear and easily understood
-Measurable- It should be easy to clarify if the goal can be met or not
-Achievable/agreed- management should se if they currently have the capabilities to reach certain targets when planning and the plan must be agreed by all concerned and involved
- Realistic- is it possible for the business to achieve this goal given the resources and time available
- Timely- a plan should have a timeline rather than being open ended. A business should know when a plan needs to be completed by

Question 5

What are the types of planning?

Answer 5

Tactical-
Contingency
-Operational
-Strategic
-Mission statement

Question 6

What is tactical planning?

Answer 6

Tactical planning is short-term planning covering a period of one or two years and usually takes place at middle management level. They are dealing with the current part of the plan. It breaks the strategic plan down into more manageable chunks.

It sets clear and realistic short-term objectives that are matched to the aims of the business.
What It focuses people on achieving goals by setting short-term targets. By monitoring whether these targets are met, management can modify their strategic plans if necessary

Question 7

What is a mission statement?

Answer 7

Mission Statement- this is a visionary statement outlining who the business is, what the business does and where the business is going, containing the business’ values. e.g. It is important as it would give an insight for the stakeholders into the core values and culture of any business which can help decision making.

Question 8

What is a contingency plan?

Answer 8

Contingency Planning- 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.

e.g. EducaPrint Ltd may have another website ready in case their eBook site got hacked.

Question 9

What is operational planning?

Answer 9

Operational plans- are short term plans for specific events or departments. They focus on the day to day running of the business. These type of plans are carried out by front line managers. Included timetables for staff and deciding production quantities

Question 10

What is strategic planning?

Answer 10

Plans created by senior management to outline how the long term goals of a business are going to be reached, sing ideas from the mission statement. Senior management do this as they have greater knowledge of the business and are able to ensure its long term profitability.

Question 11

What are the advantages of planning for a business?

Answer 11

Planning helps secure capital- a business plan is essential to convince an investor to spend their money. By setting out objectives such as cash flow forecasts the entrepreneur can reassure investors so that they are more comfortable investing capital.

Planning makes the business stronger- the business can identify areas of weakness or strengths by conducting a SWOT analysis. It can also help them assess performance as there are goals are set which motivates staff to work harder to achieve these goals.

Planning helps anticipate future problems- is allows a business to anticipate future problems and be proactive. It can allow them to plan ahead so that they can arrange things in order to meet their objectives.

Planning guides the business to success- forces the manager to focus on the future. It gives a clear focus of what the business wants to achieve so managers can direct staff more effectively, reducing risks of the business falling apart.

Question 12

Define organising

Answer 12

It is arranging the resources of a business into an organised structure in order to achieve its objectives

Question 13

What is an organising structure?

Answer 13

An organising structure involves splitting all the work to be done in the business into departments and appointing people to be in charge of these departments.

Question 14

What is the chain of command?

Answer 14

It is the order in which the power in the business is distributed from senior management at the top of the hierarchy to employees at the bottom. Instructions flow downwards and responsibly flows upwards.

Question 15

What is span control?

Answer 15

It refers to the number of subordinates that reports directly to one manager in a hierarchy. The span can be narrow if a manger only has a few subordinates reporting to them but it can also be wide.

Question 16

What does an organisation structure/ chart do?

Answer 16

It shows how an organisation expects to get things done. It has a coordinated structure so the business has the bets hance of reaching its objectives. Starting with people who oversee the different departments an then moving down to lower levels of responsibility.

Question 17

What impacts the span of control?

Answer 17

• Skill of the manager
  A more experienced manger would be more experienced with managing people so would be more competent and confident in managing a wider span of control than an inexperienced manager.

-Skill of workforce
If employees are well trained and competent in their jobs they will need less supervision as they are skilled and experienced enough to perform tasks without needing as much input from managers. This means managers can have a wider span of control as opposed to unsure employees.

-The nature of the work
If a task is very straight forward then a manger could supervise a lot of workers at one time eg packaging foods. But if it was more complex or important part of the business then it would be appropriate to have a narrower span of control to supervise better.

Question 18

What are the different organisational structures used in a business?

Answer 18

Functional
Matrix
Geographical
Product

Question 19

What is a functional organisation?

Answer 19

This is an organisation structure that shows the organisation divided into departments according to their function with managers in charge of each department.

Question 20

What are the Benefits of Functional org structure?

Answer 20

1. Specialised departments- It helps to build up skills and expertise in certain areas, as employees involved in the same type of activity are grouped together so there is clear focus and they can excel in a cetin area.
2. It creates an obvious promotional path, which motivates employees.
3. Managers are able to have a wider span of control, as areas of responsibility are clearly defined. This can lower costs as less management positions may be necessary.
4. Clear chain of command as it is clear who is accountable within the business as staff know exactly who their manager is and who to report to which improves coordination in the business
5. Clear communication- messages flow downwards from top to bottom as subordinates only have one manger leading to quicker decision making and easier feedback

Question 21

What are the Drawbacks of Functional org structure?

Answer 21

1 Focus on Department Goals- employees may work towards departmental objectives rather than the overall business goals. This can slow down business growth.

2 Slow Communication- communication can be slow between departments. This can mean the business is slow to react to change, e.g. increased competition in the market.

3 Lack of Teamwork-there may be a lack of trust between employees working in cross-departmental teams. This reduces productivity in the firm.

Question 22

What is a Geographic organisational structure?

Answer 22

It is a structure in which a business is divided based on the regions in which it operates. Each region has its own organisational structure with a regional manger over seeing it. Suit large MNC’s

Question 23

What are the advantages of a geographical org structure?

Answer 23

1. Tailor needs to locals- Allows company to focus on the need of each individual country. Each country has different consumer preferences, languages, cultures and ways of doing business, operations are suited to this.
2. Improves logistics- each location manages its own staff, resources, distribution and finances to suit the local norms and markets.
3. The healthy competition between regional departments to be the most competitive which can help motivate and improve sales.
4. Can react to local trends- is trends in one region change the local division can react quickly to shit changes and doesn’t need senior management to give direction.

Question 24

What are the advantages of a geographical org structure?

Answer 24

1 Duplication of Work-there may be duplicate departments working in different geographic areas, with employees doing the same job. This increases business costs.

2 Conflict between-management decisions made by senior management for the entire business can have a negative effect on local areas, e.g. redundancies. This can result in conflict between managers.

3 Communication- there may be poor communication between geographic units. The development of new products or processes may not be shared, which can result in organisational inefficiency.

Question 25

What is the Product org structure?

Answer 25

It is where a business breaks up its organisational structures into different parts that operate like separate businesses with each part having its own structure and all parts report to senior management.

Question 26

What are the advantages of a product org structure?

Answer 26

1 Consumer Demand-as it is focused on specific products, this structure can meet consumer needs more effectively. The producer can react faster to changes in consumer demand.

2 Monitor Product Performance-the business can monitor the performance and profits of each product unit. It may decide to discontinue underperforming products or increase promotion of products that are performing well.

3 Expert Knowledge- employees working in product divisions can develop expert knowledge. This means they can give a higher level of customer service to consumers.

Question 27

What are the disadvantages of a product org structure?

Answer 27

1.Duplication-there may be a duplication of units with multiple people doing the same job, e.g. marketing. This increases business costs.

2.Product Competition-there may be rivalry between units as some of their products may be in direct competition with each other, e.g. car models such as the Toyota Yaris and Toyota Aygo.

3. Cannibalisation- one product structure may end up introducing a new product that reduces sales and profit for another product somewhere else in the organization . e.g. a protein milk is introduced by one organisation part reducing the sales of milk for Kerry Gold in another

Question 28

What is the Matrix org structure?

Answer 28

It is an organisational structure where each department has a manger but the business adopts an approach whereby teams made up from staff from each different department work on projects together managed by one team leader.

Question 29

What are the advantages of a matrix org structure?

Answer 29

1 Increased Motivation-employees feel valued when they are part of a project team. This motivates employees and increases productivity.

2 Improved relationships- working in teams helps staff to feel more connected with other employees. It might help them to enjoy work more and increased morale and reduces staff turnover.

3 Improved Decision-making project team members have a wide range of skills and experience. It allows employees to work with others from other departments which can help generate new ideas and innovative ways of thinking as they collaborate brining together their individual skills and resources. Leading to better quality decisions.

4. Greater unity in the business- by coming together each departments gains a greater understanding and appreciation for what the other departments do. As people work together they share ideas and can generate new approaches ad ideas for products.

Question 30

What are the disadvantages of a matrix org structure?

Answer 30

1 Unclear chain of command -the employees may receive conflicting instructions from their department and project managers. They may struggle to decide which orders to prioritise. There could also be conflict between managers over authority.

2. Training Costs-employees working in teams need training in areas such as teamwork and communication to help the team work effectively. These training programmes increase business costs.

3 Disagreements of allocation of resources- member of one department may not be keen on cutting eg parts of their funding for another department especially if they are on commission from sales. Leading to disagreements and a potential loss in productivity.

Question 31

What is delayering?

(Not in textbook)

Answer 31

Delayering refers to the process of reducing the number of management levels within an organization. The primary aim is to simplify structures, speeding up the decision-making process, and increase the span of control.

Question 32

WHat are the Advantages of delayering
(Not in textbook)

Answer 32

1 Improved Communication-faster communication throughout the organisation, as the messages pass through fewer levels.

2 Reduced Costs-delayering often involves removing managerial staff. This reduces wage costs for the business.

Question 33

Disadvantages of delayering

(Not in textbook)

Answer 33

1 Decreased Motivation-employees may fear for their own job security. This can decrease motivation and reduce productivity among staff.

2 Managerial Span of Control-delayering can result in a wider span of control for managers. This increased workload may lead to stress and burnout.

Question 34

What are the ways in which communication can flow?

Answer 34

Upward communication – staff reporting up the chain of command to supervisor/manager.

Downward communication – messages sent from the chain of command e.g. manager to staff.

Horizontal communication – communication between people in the same rank and authority in the chain of command e.g. finance manager and HRM

Question 35

What should a business consider when CHOOSING AN ORGANISATION STRUCTURE

Answer 35

Consumer demand- a business may choose a product or geographic structure so that it can satisfy consumer needs more effectively.

Specialisation-if the business wants its employees to become experts in a particular business area it may choose a functional organisation structure.

Intrapreneurship- The business may choose a matrix organisation structure to encourage intrapreneurship and develop new products and processes for the firm.

Question 36

What are the Benefits of organization as a management activity

(not in textbook)

Answer 36

Clear chain of command- it ensures everyone in the business knows who to report to
Improved communication- management can send communication down to staff and staff can send it up to managers
Management workload- the workload can be distributed more evenly to prevent managerial stress and work overload

Employee motivation - it shows employees that thre is a clear promotional path in the organsin

Question 37

Define controlling

Answer 37

It involves the manger making sure that the Business stays on target to achieve the objectives that were set during the planning phase.

Question 38

What is stock control?

Answer 38

This is the monitoring of stock levels to ensure that there is enough stock to meet demand while keeping costs to a minimum/stocks are at optimum levels. Every business should carry the minimum amount of stock.

Question 39

What are the Methods of Managing Stock Levels

Answer 39

Manual Stock Take
Employees physically count and record all stock in the business. The stock counted is compared to the quantities recorded on the firm’s computer system to identify any differences, e.g. due to theft.

EDI (Electronic Data Interchange)
EDI enables firms to communicate information such as orders, invoices and payments electronically rather than on paper. The documents can be transferred without the need for human intervention.

Just in Time (JIT)
The business holds the minimum amount of raw materials and receives regular deliveries from suppliers, thus ensuring that it never runs out of stock.
All finished goods are completed just in time for delivery to consumers.
JIT helps to reduce business costs such as storage, insurance and security.

Question 40

What Benefits of stock control?

Answer 40

Increased efficiency- modern stock control systems are computerised and are often more accurate than humans.

Feedback- there is instant feedback on all stock levels for each item, enabling easy identification of slow- and fast-moving items.

Reduced costs- The costs associated with having too much stock, such as obsolescence and storage, and with having too little stock are reduced.

Theft- it is easier to identify theft, as stock is accurately monitored.

Question 41

Define Quality Control

Answer 41

It is A set of procedures used to check work completed to ensure it meets the standards set.

Question 42

What is the Purpose of Quality Control?

Answer 42

1. Detect- Identify whether there are any quality issues in the business.
2. Prevent- Set up procedures that will prevent quality issues arising in the future.
3. Correct- Take corrective action to prevent problems in the future.
4. Improve- The business should constantly strive for improvements in quality.

Question 43

What are quality awards?

Answer 43

These are awards given by independent organisations when a business achieves an agreed quality standard.

Question 44

Give three examples of quality awards

Answer 44

Q Mark
Bord Bia Quality Mark
ISO 9000 series

Question 45

What is the ISO9000 award?

Answer 45

This is an internationally recognised award that is given only to businesses that can consistently prove that their products meet the highest quality standards. It is an international badge of excellence.

Question 46

What is TGM?

Answer 46

TQM is a system of quality management where the whole business seeks to improve quality in all areas of the firm

Question 47

What are then benefits of quality control?

Answer 47

Quality awards- These awards can be used as part of the firm’s marketing campaigns and increase consumer trust in the business.

Reduced costs- Effective quality control reduces business costs, as the firm does not spend money repairing and replacing poor-quality products for consumers.

Customer satisfaction- Consumers are satisfied with the high-quality products provided by the firm and this helps to increase the firm’s sales and profits.

Question 48

when IS A BSUINESS AWARED A Q MARK?

Answer 48

A business is awarded his when they focus on continuous improvements and deliver high standards in quality and excellence to every consumer

Question 49

What is credit control?

Answer 49

Credit control ensures that customers who use credit facilities pay their bills in full and on time.

Question 50

What are Benefits of Credit Control?

Answer 50

Bad Debts are reduced- Firm controls the amount of goods sold on credit. Debtors pay debts on time. Bad debts are kept to a minimum.

Increase sales and profits- The credit worthiness of potential customers is checked in advance.

Lower risk of bankruptcy- Good credit control will ensure that maximum cash is collected from debtors. Firms will not have to relay on bank overdrafts to deal with cash shortages.

Question 51

How can a business minimise bad debts?

Answer 51

Check customers credit- when dealing with a new customer thy should ask for bank references to see than there is regular and sufficient cash flows so they can repay the business in the future.

Set credits limits- Different customers should get different credit limits eg a recurrent customer who has built up a good relationship in the business as they know they will pay off what they ow will b given a bigger credit limit than new members.

Penalise late payments- a business could add on additional costs if a debtor pays late and this would deter them.

Organised communication with debtors- having good communication with them through email etc gives reminders and helps debtors to be more organised and more inclined t make payments quicker.

Question 52

What is financial control?

Answer 52

Financial control aims to ensure that the business is profitable and liquid (liquidity is the ability to pay bills as they fall due).

Question 53

What does controlling liquidity mean?

Answer 53

Ensuring a business will not run out of cash to pay off short term debts as they arise

Question 54

what are the Benefits of financial control?

Answer 54

Provides a benchmark- against which actual performance can be compared, and Planned / target performance and Deviations can be reported, thus aiding control
Allows the timing and sources of cash inflows and outflows to be identified.

Enables establishment of Net Inflows/Outflows – The business can then plan effectively to meet cash shortages, or consider options in relation to any large cash surplus.
Necessary when looking for finance from financial institutions

Question 55

What are the methods of financial control?

Answer 55

Cash flow forecast- can be used to see if there are any planned future income and expenditure

Ratio analysis- it can be used to obtain a quick indication of an organisations financial performance and sate of affairs

Budget allocation- The business sets a budget for each department helping the business to control spending in different areas of the firm.