Section D Flashcards
What does Mintzberg suggest?
Businesses can be split into six building blocks
What are the three things inside the Mintzberg?
Strategic Apex
Middle Line
Operating Cor
What are the two things on the outside of the Mintzberg?
Technostructure
Support Staff
What is on the tip of the mintzberg?
Ideology
What is the operating core of the Mintzberg?
Basic work of organisation
What is the strategic apex of the Mintzberg?
Higher levels of management
What is the Middle line of the Mintzberg?
Links strategic apex and operating core
What is the technostructure of the Mintzberg?
Designs procedures and standards
What is the support staff of the Mintzberg?
Provides Services
What is the ideology of the Mintzberg?
Organisations values and beliefs
What are the four types of business structures?
Entrepreneurial
Functional
Divisional
Matrix
What are the advantages of an entrepreneurial structure?
Fast Decision Making
Good Control
Responsive to market
Close bond to workforce
What are the disadvantages of an entrepreneurial structure?
Success dependant on owner
Lack of career structure
Cannot cope with growth
How is a functional structure laid out and what are the features?
Directors with the four functions underneath.
Common to organisation who have outgrown entrepreneurial structure
Appropriate to smaller companies with few products and locations
What are the advantages of a functional structure?
Economies of scale
Standardisation of outputs and systems
Specialists more comfortable
Career Opportunities
What are the disadvantages of a functional structure?
Empire building and conflicts between functions
Slow to adapt to market
Cannot cope with rapid growth
How is a divisional structure laid out?
Directors with divisions just below. Then functions for each division.
What are the advantages of a divisional structure?
Enables product or geographical growth
Clear Responsibility
Decision Making
Top managers free to concentrate on strategic matters
What are the disadvantages of a divisional structure?
Duplication of business functions
Lack of goal congruence
Specialists may feel isolated
Potential loss of control
What is goal congruence?
consistency or agreement of individual goals with company goals
What is economies of scale?
proportionate saving in costs gained by an increased level of production.
Costs go down per unit with increased production
What is the matrix structure?
Combines divisional and functional structure
What are the advantages of a matrix structure?
Flexibility
Encourages Teamwork
What are the disadvantages of a matrix structure?
Dual Command
Lack of individual accountability
Time - Consuming meetings
What is a centralised structure?
Upper levels of organisation retain authority
What is a decentralised structure?
Authority is passed down to units and people at lower levels
What is a scalar chain?
Line of authority than can be traced up or down chain of command. Relates to number of levels of management.
What is a span of control?
Considers how many people report to one superior
What are the four levels of the diamond shape from top to bottom?
- Senior Finance team
- Strategic business partnering
- Digital centres of excellence
- Smart Finance Functions
In what order has the typical triangle changed?
Hierarchical, Segregated, Digital Age
What are the three reasons why the triangle shape has changed?
Changing mandate for Finance
Technology
Finance Function Capability
What is outsorcing?
Contracting out aspects of work of organisation
What is a shared service centre?
Established for a particular activity of organisation
Company chooses to operate at one site
‘Internal Outsorcing’
What is a service level agreement?
Agreement between supplier and customer and is a legal agreement regarding level of service provided
What is a transaction cost?
Indirect cost incurred in performing a particular activity
What are the benefits of outsourcing the finance function?
Cost Reduction
Radical Transformation
Access to superior capabilities, expertise and resources
Business Partnering
What are the drawback of outsourcing the finance function?
Loss of Control
Causes disruption
Risk of intellectual property theft and data breeches
Erosion of external knowledge and control
What are the benefits of having a finance shared service centre?
Cost Reduction
Opportunity to standardise processes
Improved level of service
What are the drawback of having a finance shared service centre?
Employee Issues
Lack of system integration
What does the finance factories include?
Finance operations: Financial Reporting Treasury Management Management Accounting Internal Audit
What is financial reporting?
produces finance information for external uses
May include financial statements, tax reporting and regulatory reporting
What are three types of financial statements?
Profit & Loss
Financial Position
Cashflows
Who do the finance factories provide statements for?
Owners Banks Suppliers Managers Employers Customers Government
What do management accountants do?
Provision of information to help managers and other internal users in decision making, performance, planning and control.
Reports includes cost schedules, budgets and variance reports.
How can managements accountants helps a business and what are some examples?
Help business make decisions including pricing decisions, break-even analysis, key factor analysis, Investment analysis
What is the acronym for budget and what does it stand for?
CRUMPET Co-ordination Responsibility Utilisation Motivation Planning Evaluation Telling
What does treasury management do?
Management of business funds, namely cash, working capital, long and short term investments.
What are two main types of external financing?
Debt: Borrowing cash from a third party
Equity: Selling a stake in the business
What does internal audit do?
Independent activity, examine and evaluate organisations risk management processes and systems of control, make recommendations for achievement of company objectives
Who is included in the digital centres of excellence?
Specialist Areas: Financial Planning & Analysis Taxation Project Management Project Appraisal
What does taxation do:
Minimises Risk
Creating Value
Tax Compliance: Following current legislation, regulation and procedures.
Tax Planning: Focuses on esuring organisation is working in the most tax efficient way
What does project management do?
Ensures the proper knowledge and resources are available when and where needed.
Ensures expected outcome is produced in timely, cost effective manner.
What is project appraisal?
First stage of project management process.
Involves assessment and evaluation of many decisions and potential outcomes.
What are some appraisal methods?
Payback
Net Present Value
Internal Rate of Return
What does strategic partnering for value do?
Communicating insight to influence users
Business partnering
What do strategic leadership of finance team do?
Leading key initiatives that support the organisations goals.
Executing and funding strategies set by the CEO
Liaising effectively with internal and external stakeholders.
Which functions does the McKinsley report think will be automated by advancing technology?
Data Collection 64% Data Processing 69% Applying Expertise 18% Stakeholder Interactions 20% Managing Others 9%
