Unit 3: management activities Flashcards
planning
occurs when management looks to the future amd sets specific goals for the business. the manager puts strategies into place to achieve these goals. planning gives a business purpose and direction and reduces risk/uncertainty
SMART plan
specific
measurable
achievable
relevant
timed
steps in the planning process
- assess the current situation
- set a goal
- create a plan
- implement the plan
- review the plan
SWOT analysis
strengths
weaknesses
opportunities
threats
mission statement
short written statement that sets out the firm’s overall goal for the lifetime of the business
strategic plan
1-5 years, senior management. breaks down the mission statement into long term business plans
tactical plan
1-2 years, middle management. breaks down strategic plan into short term plans. helps business achieve strategic plan
operational plan
0-1 year, all management levels. plans day to day running of the business
contingency plan
0-1 year, all management levels. back up plans used to deal with unforeseen events or emergencies
HR/manpower plan
0-1 year, HR manager. ensures the business has the correct number of employees, with the correct skills and qualifications, at the correct time
financial plan
0-1 year, finance manager. businesses prepare cash flow forecasts to predict the amount of income they will receive and spend in a particular period of time
investors and planning
financial planning shows investors that business can repay loans. also shows projected profits (increased dividend)
employees and planning
HR planning indicates future promotion opportunities, motivates them to work harder to apply to these vacancies
suppliers and planning
strategic and tactical plans indicate that business intends to expland, gives supplier opportunity to sell more raw materials
benefits of planning
- anticipates problems
- identifies SWOT
- benchmarking (comparing planned progress with actual results)
- improves motivation
- finance
Organising
occurs when the manager coordinates all business resources, e.g. employees, capital, raw materials, into the most effective format to achieve organisational goals
functional organisation structure
firm divided into departments based on the function they perform, e.g. finance, marketing, production. each department has a manager responsible for achieving departmental goal
advantages of functional structure
- employee motivation
- expert knowledge
- responsibility
disadvantages of functional structure
- focus on departmental goals
- slow communication
- lack of teamwork
geographic organisation structure
business divided into geographical areas, e.g. region, country, continent
advantages of geographic structure
- local managers
- friendly competition
- promotion
disadvantages of geographic structure
- duplication of work
- conflict between management
- communication
product organisation structure
business divided into units based on the type of product it provides to consumers
advantages of product structure
- consumer demand
- monitor product performance
- expert knowledge
disadvantages of product structure
- duplication
- product competition
- poor communication
matrix organisation structure
employees work in various departments, e.g. finance, marketing, and then come together to work jn cross functional teams to complete business projects. employees report to department manager and project manager
advantages of matrix structure
- increased motivation
- improved communication
- improved decision making
disadvantages of matrix structure
- multiple managers
- training costs
- lack of trust
span of control
relates to the number of employees who directly report to a manager. can be wide or narrow
factors affecting span of control
- trust
- employee skills
- tasks
- managerial workload
delayering
involves removing one or more management layers in an organisation structure
advantages of delayering
- improved communication
- reduced costs
disadvantages of delayering
- decreased motivation
- managerial span of control
advantages of organising
- clear chain of command
- improved communication
- management workload
- employee motivation
controlling
management activity that measures how well an organisation achieves the goals and objectives that it has set. involves settting standards, measuring actual performance against standards, and taking necessary corrective action
steps in controlling
- set standard
- measure performance
- compare performance with standard
- take corrective action
stock control
aims to keep optimum stock levels so that organisation doesn’t have too much or too little stock
types of stock
- raw materials
- work in progress
- finished goods
- merchandise
lead time
time from when an order is placed to the stock arriving at firm’s stockroom
manual stock take
employees physically count and record business stock.
EDI
electronic data interchange.
enables firm to communicate info e.g. orders, invoices, payments electronically
benefits of EDI
- quicker reordering process
- lower costs
- lead times
- shorter processing times
JIT
just in time.
business holds min. stock level and receives regular deliveries from suppliers. buys from reliable suppliers that provide exact quantity and quality of stock when needed.
reduces business costs such as storage, insurance and security
benefits of stock control
- increased efficiency
- feedback
- reduced costs
- theft
quality control
a set of procedures used to check work completed to ensure it meets the standards set
inspections
trained inspectors carry out tests on finished goods (all or sample). if it fails batch is scrapped
quality circles
group of factory floor employees meets regularly to identify and discuss quality issues at the firm. recommends solutions to management
benefits of quality circles
- employee motivation
- reduced costs
- improved quality
quality awards
awards given by independent orgs. when business achieves agreed quality standard
Q mark
irish quality award given by EIQA (excellence ireland quality association)
Bord bia quality mark
awarded to firms that produce and process food in Ireland that meet bord bia standards
ISO 9000 series
international quality award system: firms must meet very high standards of quality control and are subject to regular spot checks.
benefits of quality awards
- consumer trust
- marketing
- exports
- pricing
TQM
total quality management.
system of quality management where the whole business seeks to improve quality in all areas of the firm
benefits of quality control
- consumer satisfaction
- quality awards
- reduced costs
credit control
ensures that customers who use credit facilities pay their bills in full and on time
debtor
person who owes the business money
credit control system
- set credit limits
- check creditworthiness
- efficient administration
- debt collection procedure
set credit limits
maximum amount of credit that a business should provide to a customer
check creditworthiness
firm assesses ability of customer to repay amount owed
liquidation
when an org. unable to pay bills as they fall due
bankruptcy
org. declared by law as being unable to pay debts
efficient administration
firm must ensure documents e.g. invoices are accurate and sent on time
debt collection procedure
e.g. sending reminders, offering discounts on early payments, charging interest on late payments
credit controller
person in firm who decides amount of credit given to customer and who is responsible for debt collecting
benefits of credit control
- lower risk of bankruptcy
- reduces bad debts
- increased sales/profits
financial control
aims to ensure the business is profitable and liquid
methods of financial control
- cash flow forecast
- ratio analysis
- budget allocation
importance of control
- identify issues/ achieve business goals
- maximise resources
- employee motivation
- increased sales/profits
