Structure and shape of the finance function Flashcards
Mintzberg organisation- What are the 5 component?
- Strategic Apex- drives direction of business through control over decision making
- Technostructure - Drives efficiency through rules and procedures.
- Operating core - performs the routine activities of organisation in proficient and standardised manner.
- Middle line- Performs management functions of control over resources, processes and business area.
- Support staff - provides expertise and service to the organisation.
What is the Simple Structure?
Strategic apex is dominant. No formal structure or planning. Control exercised by direct supervision. Effective in small entrepreneurial organisations where flexibility is important.
What is the Machine Bureaucracy?
Technostructure is dominant. Control is by rules and procedures and work is highly standardised.
What is Professional Bureaucracy?
Operating core is dominant. Processes are too complex to be standardised. Control exercised via training, individual expertise. Professional firms and hospitals.
What is the Divisionalised structure?
Middle line is dominant. Split into divisions. Control is exercised via performance measures such as profit.
What is the Adhocracy structure?
Support staff is dominant. Innovation is critical and work tends to be project based.
What is the Missionary Structure?
have little structure or formal control. held together by set of shared values, reinforced by strong culture. Start-up companies.
What are the 3 types of Boundaryless organisations?
- Virtual organisations- only exists on internet. no physical offices,
- Modular organisations- break manufacturing process down into modules and components which are then either made by the business of their production is outsourced.
- Hollow organisations - split their activities into core and non-core. Core activities are kept inhouse and non-core outsourced.
What is the Structure of the Digital Age organisation?
- Strategic Leadership (Senior finance team)
- Strategic business partnership for value to influence and shape how organisation creates and preserves value (Business partnering).
- Technical specialists providing insights in respective areas (Digital centers of excellence)
- Managing processes and applying accounting rules to assemble and extract data. (Smart finance factories)
What is a Shared Services Centre (SSC)?
Centralising operations that previously existed in more than one part of the organisation. Referred to as ínternal outsourcing’.
What are the 5 benefits of SSCs?
1.) Cost savings (lower headcounts,premises costs)
2.) Standardised processes (reduce risk of errors,allows for consistent reporting)
3.) Selection and delivery of single best practice from all operations means an improved level of service
4.) Improved control and quality
5.) Consolidation of information systems
What are 4 risks of SSCs?
1.) Insufficient organisational resources to establish them
2.) HR issues such as redundancy costs and impact on morale
3.) Consolidating systems may be costly, time consuming and complex
4.) Language, cultural and reporting requirements may not be understood by SSC
What are the requirements to establish a SSC?
- commitment to continuous improvement
- clear scope and delegation of responsibilities
- clear vision of role of SSC within organisation
- Buy-in to change by all involved
- Provision of support from those with experience of change
- Ensure organisation is robust after the change
-Strong customer focused culture
What is Business Process Re-engineering (BPR)?
Involves an organisation transforming business processes, often redesigning them from the ground up.
What re the 4 themes of BPR?
- Process reorientation
- Creative use of IT
- Ambition
- Challenge and break rules
