CFAB business
What is a B2B?
"Business to business" it is an INDUSTRIAL MARKET. Making raw materials, supplies, services, capital goods , components etc.
What is an oversight mechanism?
' maintaining a watchful eye' there must be- -Sufficient independence so it is not compromised by undue influence. -Knowledge it is regulated - Taking a wide view to balance the various stakeholder interests. - Having authority Oversight is affected by conduct division and organ of FRC.
is it the organic structure of the mechanistic structure that has a ' Network structure of control'?
'Network' is organic structure
What can you do to check data validation?
(Checking its complete & reasonable) - CHECK digits - checks for errors - CONTROL total - this reconciles so it can address completeness and accuracy. - HASH TOTALS ( processing has been performed) When necessary, the hash total is recalculated and compared with the original. If data are lost or changed, a mismatch occurs which signals an error. - RANGE CHECKS - check against a sensible range, can show the value is accurate but NOT all transactions have been accounted. - LIMIT CHECKS. ... must be less than XXX
What are the advantages of a Functional structure ?
(Traditional) - Good career opportunities - Efficient as functional tasks are well-known and understood by individuals. - Exploits specialist functional skills.
what is the PED formula?
(ignore the minus) percentage change , difference/orginal for BOTH price & demand Then you do demand% DIVIDED by price%
What are Heizberg MOTIVATIONAL factors?
- A sense of achievement - Challenging work - Reponsibility - Advancement -The Job itself. - BONUSES
What is the UK Corporate Governance Code 2012?
- Accountability - Transparancy - Prohibity -Focus on the sustainable success of an entity over the longer term.
What are advantages of group companies?
- Allows for different structures and cultures to be developed - Allows transfer of funds, people and tax losses - Risk of failure is spread - Minoriy shareholdings can be retained - Skills, admin , equip can all be shared.
What happens if through your risk management you found a risk to be high probability but high impact?
- Avoid if possible - Control -Reuduce -Sharing
What are the two types of financial systems?
- Bank- based system - Market based system
What are the 5 main sections of the UK Corporate Governance code?
- Board leadership and company purpose - Division of responsiblities - Composition, succession and evaluation. - Audit,risk & internal control - Remuneration
What are the disadvantages of a simple/entrepreneurial structure?
- Cannot epand beyond a certain size - Cannot easily cope with diversification into new products - Lack of career structure - Too centralised
What are the 6 things which affect the consumptions by households?
- Changes in disposable income & the marginal propensity to consume - changes in distribution of wealth - Government policy - Development of major new products - Interest rates - Price expectation
What areas is a professional accountant in business in?
- Commerce - Industry - Service - The public sector - Education - The not-for-profit sector - Regulatory or professional budgets
What is the Key factors for a Professional Bureaucracy?
- Complex Static - Professional simple systems - Operating core is its Key building block - Standardisation of SKILL is Key corordinating mechanism.
What is the ..... of Adhocracy/innovative structure: - External environment? - Key building block ? - Key co-ordinating mechanism?
- Complex dynamic - operating core - Mutual adjustment
what are the 4 Metrics from the ICSA Solutions report to measure resilience?
- Complience - Completeness - Value - Capability
What are the disadvantages to the Matrix Structure ?
- Conflicting demands on staff time - two bosses argue - Conflicting demands over allocation of resources - Dilution of authority
What happens at point 'A' of the business cycle (Recession)?
- Consumer demand falls -Investment projects look unprofitable - Business failures as they can't sell their goods - Production falls = employment falls - general price begins to fall - Business & consumer confidence is diminished - Investment remains low - Economic outlook appears to be poor
What are the four types of structured data ?
- Created data - created on purpose by the business for market reseach. - Provoked data - obtained from people who have given an opportunity to express views. - Transacted data- collected from transactions, such as website traffic - Compiled data -collected by a 3rd party such as a market research , such as credit rating
How can you ensure the integrity of a control data system?
- Data verification - Data validation - Back up & archive strategy - Personnel selection - Segregation of duties
What are the advantages of centralisation ?
- Decisions are easier to co-ordinate - Senior managers can take a wider view of problems and consequences - Keep control - Quality of decisions is better by senior managers skills - Congruent decisions - Cheaper - Crises decisions take more quickly
What are the disadvantages of the demand-side policies?
- Demand management interventions are inflationary in the long run - High taxes act as a disincentibe to economic activities - Politically motivated policy changes creates damaging uncertainty & disencourages long term investment.
What are the disadvantages of a joint venture ?
- Disputes over how the business should be run - if the relationship breaks down, the skills acquired could be used against them.
What are the 7 types of information management systems?
- Executive support/executive information systems. - Decision support systems - Expert systems - Knowledge work systems - Office automation systems (OAS) -Transaction processing system - Manageent information systems
What can affect a demand curve but be outside the control of the business?
- Fashion - Consumers income - Price of substitute goods - Price of complementary goods.
What are the disadvantages of group companies?
- Financial reporting is complex - Great deal of administration - Legally the risk is sprad, failure of a group can have detrimetal affects on all other companies in the group.
What are the advantages for a Divisional structure?
- Flexible and can grow - Good for developing mangers - Reduces number of levels for management - encourages attention to efficiency & lower costs - Better decisions on performance by managers 'in the know' for example they are in that location, so know what that location needs. - Releases top management to concentrate on strategic issues. - Reduces the likelihood of unprofitable products and activities being continued.
What are the disadvantages of an organisation chart?
- Frequent updating when people leave - Informal relationships not shown - May imply managers at the same level are equally important - May encourage bureaucracy
What are Star products?
- HIGH Market share - HIGH Market growth Best for generating cash - Iphones
What are the Characteristics of Bureaucracy ? (8)
- Hierachy of roles - Specialisation and training - Professional nature of employment - Impersonal nature (Formal procedures) - Rationality (Hierachy clearly defined - Duties are established and measures of performance set) - Uniformity in performing tasks. (executed the same) - Technical competance - Stability.
What are the advantages of Bureaucracies?
- Ideal for standardisation and routine tasks - Very efficient in stable envrionments - Rigid adherence to procedures is necessary for fairness. - People can like a structured, predictable environment.
What are the governments macroeconomic policies to acheive growth & control inflation?
- Influencing overall (aggregate) demand in the economy via: Monetary policy - interest rates/availability of credit Fiscal policy: Government policies on taxation, public borrowing & spending influencing overall supply in the economy.
What are the disadvantages of a tall business?
- Inhibits delegation - Rigid supervision blocks initiative - The same work passes through too many hands - Increases administration and overhead costs - Slow decision making and response.
What are Nolans principles for ethical values? (5)
- Integrity - Objectivity - Accountability - Openness - Honesty
What is the CMA (competition and market authority) responsible for?
- Investigating mergers - Conducting market studies - Investigating possible breaches of prohibitions against anti-corruption agreements -Bringing criminal proceedings against cartels - Enforcing customer protection legislation - Encouraging regulators to use their competition powers
What are the disadvantages of the flat business ?
- Jobs HAVE TO be delegated - Managers only get a superficial idea of what goes on. - Sacrifices control - Middle Managers are often necessary to convert the grand vision of the strategic apex into operational term.
What is Axis 2 for ICSA Solutions report ' Building a resilient organisation' for more general characteristics?
- LEvel of trust employees have - Level of trust of customers - Ability to innovate - Extent values are understood - Extent values drive employee behaviour - Ability to operate risk management - Employee morale - Leadership & senior management involvement.
What are Cash cows products?
- LOW market GROWTH - HIGH market share Unchanged products, reliable income & need constant demand. I.E food.
What does the ICSA solution report identifies as challanges which prevent a resilient organisation?
- Lack of exepertise - more complex, more expertise needed - Lack of input from senior mangement - Siloes for delivery (Lack cross-oragnisation collabs) - Limited Sharing of risk info
What principles must premium listed companies comply with?
- Led by an entrepreneurial board wuth long-term sustainable success of the company, generating value to shareholders & contributing to wider society. - Companies purpose, values, strategy & satisfy itself that these and its culture are aligned. All directors must act with integrity - Ensure neccessary resources are in place for a company to meet its objectives. Must establish prudent controls & risk assessment - Encourage the board to engage with shareholders & stakeholders. - Workforce policies & practices are consistant with the companies values & be able to raise matters of concern.
What are the advantages of a joint venture?
- Less capital and less risk - Reduces comptition - Enables firms to gain access to restricted markets - access to the skills of each party.
What is the organisational structure framework intended to do?
- Link individuals - Allocate tasks - Co-ordinate objectives & activities - Give each group authority - Facilitate the flow of work.
What factors affect the amount of decentralsiation? (8)
- Local knowledge needed - Geography - Technological advancement - Ability of management - Effectiveness of communication - Activity diversification - Size of organisation - Leadership style.
What are the 3 basic aspects of a professional accountants work?
- Maintaining control & safeguarding assets - Financial management - Financial reporting
What is perfect competition?
- Many small buyers & sellers, cannot influence market price. - No barriers for entry and exit -Perfect information - business methods are identical - Homogeneous products (identical) - No collusion between buyers & sellers.
What are the 4 traditional business functions ?
- Marketing - Operations - Human Resources - Finance
What is the demand-side policies?
- Monetary policy - Fiscal policy (spending/borrowing/tax) (government intervention)
What is supply-side economics?
- More involvement of the private sector in provisions of services - reduction in taxes to increase incentives to supply - increasing flexibility in the labour market by curbing the power of trade unions. - improving education & training so the quality of labour is better - increasing competition through deregulation and privatisation of utilities. - Abolition of exchange controls & allowing the free movement of capital.
What are the advantages of a flat business ?
- More opportunity for delegation - Relatively cheap - Speeds up communication
What is an expliotative authoritative leadership style? (Liket)
- Motivation based on threats. - Lower status employees get no say and teamwork is very little - Responsibilities are given to higher ranks imposed on the subordinates. - Superior people are no trust or confidence in the subordinates.
What are the advantages of a tall business?
- Narrow spans of control - Small groups enable participation - Assists management training and career planning.
What did Urwich state about the 'Span of Control'?
- Need tight managerial control top to bottom - Span of control should be restricted - Span of control is too wide , too much of the managers time will be to supervision instead of planning. - Span of control too narrow - Manager may fail to delegate and will interfere.
What are FRC's 3 Mains riles regarding Audit & Accountancy?
- Non-statutory oversight of the professional accountancy bodies (exercising their regulatory responsibilities in relation to their members) - Statutory oversight of the regulation of statutory auditors by the recognised bodies ACCA ,ICAEW etc. So it is responsible for the recognition of these bodies. - Independent monitoring of the quality of the auditing function.
What do you need for self-regulation to work?
- Not against the public interest - Guidence and importance is understood and enforced - Members 'buy in' to the process - there is an OVERSIGHT MECHANISM.
What is Mintzbergs 6 building blocks for organisational structure?
- Operating core - Middle line - Strategic apex - Support Staff - Technostructure -Ideology
What are the 3 main moels of comminicating the structure of the business?
- Organisation CHARTS - Organisation MANUAL - Job Decription
What is the role of the government in the national economy?
- PRODUCER of goods & services - PURCHASER of goods & services - INVESTS in capital goods - makes TRANSFER PAYMENTS from one section of the economy to another, i.e NHS
What are the 4 trading risks ?
- Physical risk - goods lost/stolen - Credit risk - payment default by customer - Trade risk - The risk of the customer refusing goods upon delivery. - Liquidity risk- inability to finance the credit given to customers
Why do managers an bsuiness's require finiancial information?
- Planning - Controlling - Recording transactions - Performance meaurement - Decision making
Rachaels works log, when it tells them the time she logged on, what transactions she has authorised, what 3 control objectives does it coveR>
- Prevention - Detection - Deterrence
What are the advantages of DEcentralisation ?
- Prevents overburdening top managers - Improves motivation of more junior mangers - Greater awareness of local problems by decision makers - Greater speed of decision making to changing markets - Helps develop skills of junior managers. - Delegate authority
What factors influence supply?
- Price obtainable for the good - The prices of other goods - The price of related goods in ' Joint supply' - The costs of making the good - Changed in technology - weather/natural disaster etc
What are the 4 'P's in the marketing mix for goods?
- Product - Price -Promotion -Place These are all marketing variables in the marketing mix
What are the 7 'P's in the marketing mix for services?
- Product - Price -Promotion -Place -People -Processes (how effective a service is) - Physical evidence (give physical substance ,logos,staff uniforms)
What is the product life cycle?
- Product development - no sales & a loss - Introduction - Gain some profits and sales take affect - Growth - Sales increase and so does profit - Maturity - Sales & Profit have reached their peak - Decline - Profits & sales decline
What are the advantages of an organisation chart?
- Provides at glance info - Highlights formal relationships - Need to analyse organisation detail.
What are the 4 perspectives on what corporate governance should be ?
- Public policy - Stakeholder perspective - Corporate perspective - Stewardship perspective
What are the 6 things we find in the internal process model of management ?
- RATIONALITY - use of most efficient means to meet objectives -HIERARCHICAL LINES OF AUTHORITY- managers have closely defined areas of authority -DETAILED RULES AND PROCEDURES - DIVISION OF LABOUR -IMPERSONALITY - appraisals of staff are based on objective criteria not personal performance - CENTRALISATION
What can high inflation cause?
- Redistribution of income & wealth - balance of payments effects - price signalling & noise - Wage bargaining - consumer behaviour
What happens if through your risk management you found a risk to be low probability but high impact?
- Reduce it - Get insurance
What are the advantages of a Matrix structure?
- Reflects importance of project or customer, so may improve relationship and sales - Business co-ordinated with regard to technology, information etc
What are the 6 things the National Cyber Security Centre identified that business's can used to counter the threat of cybe attacks ?
- Report cyber attacks - Cyber risk mitigation - use cyber security - Manage cyber security - Promote awareness - Share knowledge and expertise -Develop cyber skills and awareness
How would a business analyse its own task environement?
- Resources and competencies, using a position and resource audit - its value chain - its supply chain - its products and markets, such as the product life cycle and BCG matrix
What is the Institute of Business additional ethics ?
- Respect -Transparency - Openness - Fairness - Trust
What is Participative leadership style ? (Liket)
- Responsibility is widespread. - Superiors have high level of trust and confidence in subordinates. - Job related issues are discussed frequently - High level of teamwork - Motivation is based from rewwards and job involvement.
What are the 5 rights of procurement?
- Right Quality - Right Quantity - Right Place - Right Time - Right Price
What is AXIS 1 for the ICSA Solutions for building a resilient organisation ? (processes & functions that protect the business)
- Risk management - Business continuity planning - Security - IT disaster recovery - Health & Safety - Crisis management - Internal Audit - Governance
What is good practice for corporate governance?
- Risk management - Ethical & sustainable pursuit of business strategy - Openess & Transparancy - Integrity & probity - Accountability - Reconciling the interest of shareholders.
What are the risks big data ?
- Running out of storage space - Requiring greater skills from the workforce - Too dependent on it for decisions - info overload - breaching data privacy -Breach of cybe security.
What is fiscal policy?
- SPENDING -TAXATION - BORROWING
What are the characteristics of Johnson & Scholes strategic decisions?
- Scope of business activities - Match activities to its capabilities and environment - Revolve around allocation of resources - set off a chain of 'lesser' operational decisions - They are based on the values and expectations of senior management - They dictate the long-term direction that the business takes - They lead to change in the business.
What are the disadvantages of bureaucracies ?
- Slow decision making - Uniformity created conformity - Suppress innovation - hard to learn from mistakes - slow to change - communication is restricted to established channels.
What are the 4 'S's that from the internet of things?
- Smart devices - Software - Sensors - Security devices
What makes information valueable?
- Source it came from - Ease of assimilation -Accessability - Relevance
What are the disadvantages of a Divisional Structure ?
- Squabbles of where central costs should occur - Interdivisional trading problems, such as transfer price. - Maybe impossible to identify completely independent products or markets for which seperate divisions can be set up
What are the 3 control mechanisms for organic structured organisation?
- Status - not hierachy, given to them by expertise and experience. - Commitment - Shared Values and culture. - culture becomes a powerful guide to behavious (google for example)
Who are the recognised professional regulators (statutes require it and you cant just call youself it) ?
- Statutory audit - Investment business - Insolvency - Probate (deceased persons)
What do you need to analyse for each competitor?
- Strategy - Assumptions - Current and potential sitaution - capability
What is strategic management?
- Taking decisions about a business's scope - Taking decisions on the long-term direction the business is going - Allocation of resources.
What Key builing block & Key co-ordinating mechanism does Machine Bureaucracy have?
- Technostructure building block - Standardisation of work
What are the 3 regulatory regimes for the accountancy profession?
- The governement - Self- regulation by the profession - Oversight mechanism from FRC.
What i a strategy concerned with ?
- The long-term direction & objectives of the business - The environment in which it operates - The resources at its disposal
When will the government raise taxation?
- To reduce the size of the economy - Reduce inflationary pressures.
What are the two types of structure for a board of directors?
- Unitary board (UK) - Two Tier Board (Germany)
What are the features of the Adhocracy/ Innovative structure ?
- Uses the matrix structure! This is for Very large, young complex tasks. Most suited for Hi-tech industries. This is where you report to two bosses.
What are the disadvantages of functional structure?
- Very ridged and unsuitable for growth & diversification - Towards an Authoritative non-participated management style -Poor/slow decisions pass along the line of authority - Functional heads (I.e HR V MARKETNG) may build an empire and inter-functional disputes may arise.
What are the four V's for Big data ?
- Volume - Velocity - great speed - Variety - Veracity - trustworthiness/accuracy
What are dog products?
- Wasted space - Low MArket Share - Low market growth Failed products & will drain your resources. Often discontinued.
How are the government & FRC intertwined?
- act as adviser to the government on necessary legislative changes - Government DELEGATE certain statutory powers to FRC.
What are the 5 internal control componants ?
- control environment - Risk management - Control activities - Information & communication - Monitoring activities
What are advantages to international free trade?
- countries specialise so materials are efficiently used - some countries have surplus of materials and others have deficit - competition is increased - Larger markets are created - Trading & political links
What 3 factors affect the savings in the economy?
- income - long-term savings - interest rates & the cost of credit.
What things alter the amount of investment in the economy?
- interest rates - Expectations about the future - consumer demand - The opportunity costs of investment - the level of new technology
What factors must you consider when making a rights issue?
- issue cost - Shareholders reaction - Control - unlisted companies
What are the advantages of using intermediaries ? (Just eat)
- more efficient logistically - costs usually lower - consumers expect choice at a point of sale - producers don't have sufficient resources to sell direct
What are the advantages of selling direct ?
- no need to share profit margins - control over ultimate sale - speed of delivery to the ultimate consumer is likely to be quicker
What is Taylors 3 basic assumptions of human behaviour at work?
- people are rational economic anumals concerned with maximising their economic gain. - people respond as individuals, not groups - people can be treated in a standardised fashion, like machines.
What are the key conditions needed for divisionalisation to be successful ?
- properly delegated authority - Large enough to support qunatity and quality needs of each mangement. - Not rely on head office for excessive management support - Must have potential for growth in each division - Should be scope and challenge in the job in each division - Divisions should only deal with eachother at ARMS LENGTH
What are the 3 things decentralisation depends on?
- size - workforce skills - effectiveness of communication across the company
What are the two tensions Quinn identifies that affect the culture ?
- tension between flexibility and control - tension between a business is inward or outward looking
What do we do as a professional accountants role for 'Maintaining control & safeguarding assets'
- the recording of transactions - Internal controls - Audit committee is properly constituted - Non-executive directors
what are the 5 tehnical controls organisations should have to protect themselves from low-level cyber risks?
-Access control - Boundary firewalls & internet gateways - Malware protection - Patch Management - Secure configuration Should be applies to ALL areas & are the MINIMUM requirements
What are the 6 types of power from French and Raven?
-Coercive power - Reward power - Legitimate power -Expert power - Referent power -Negative power
What are the main influences on pricing ?
-Costs - Competitors -Customers -Corporate objectives
What is a bank-based system?
-Exists in countries where bank lending is the most important source of finance. Such as Germany & France. -They have a LOW RISK appetite & would rather have cash in the bank than invest it. -There is often more government regulation due to historic collapses. - Banks & business's are highly integrated & have long term relationships. They often: - have a seat on the board of the business - Bank has access to detailed financial info - Having equity held by the business - Holding equity in the business
When would the accounting profession be directly affected by regulation?
-Firm acts as an investment business - the FCA advises of listing rules that FTSE 350 companies are required to comply with.
what are examples of collusive behaviour ?
-Fixing purchase or selling prices -Agreeing to limit or control productions -Sharing markets or supply sources -Applying different trading conditions to equivalent transactions - Making a conclusion of contracts.
What are the 3 types of market segmentation?
-High income groups- promotion - to create the image of quality, status. - Families with children - product, size , safety - low income groups- price,
What are the 4 types of culture Quinn identified ?
-Internal process culture - Rational goal culture -open systems culture - Human relations culture
What are the core aspects of the South Africas King report?
-Leadership -Sustainability -Good corporate citizenship.
What is point 'C' of the business cycle ? (Recovery)
-Output, employment & income will all begin to rise. - New investment is undertaken & business expectations are more optimistic. - There is a rising in demand & therefore production & employment - Average price levels are constant or begin to rise slowly.
How does the government regulate externalties?
-Price regulations - Direct/indirect tax -subsidies to suppliers, excourage exports -Quotas/standards/fines
What are the advantages of a simple/ Entrepreneural structure?
-Quick decision making - Goal congruence - Flexible / adaptable to change.
What is a Consultative leadership style? (Liket)
-Reponsibility is spread widely through the organization's hierarchy. -Managers have substantial but not full trust of subordinates. - Some amount of discussion of job issues between superiors and subordinates. -Teamwork does take place. Horizontally and vertically. - Motivation by rewards and job involvement.
What is Benevolent Authoritative leadership style? (Liket)
-Responsibility still lies at mangerial level. - Some trust in subordinates at a master-servent level - Decisions are imposed on subordinates - Little teamwork or communication - Motivation is based on rewards.
What is the triple bottom line for corporate responsibility?
-Social (people) - equality, equal pay, workers rights - Environmental - pollution/waste - Econimic - growth, long term viability etc.
What is the key building block & Key co-ordinating mechanism of a simple structure ?
-Strategic apex buiding block - Direct supervision
What happens at a DC (Disciplinery) hearing ?
-Tribuneral of 3 people, 2 chartered, 1 not -Held in public unless the tribuneral says otheriwise. A barrister is present. -Legal assessor (solicitor) gives advice to DC on law -Member can attend & be represented - DC can impose penalties , removal of certificate, exclusion from ICAEW.
What are managers responsible for ?
-ensure objectives are set in line with the shareholders interests -monitor the progress of performance -organisations corporate values and ethical principles are communicated.
what are the 4 factors of production?
-enterprise -labour -land -capital
What is the number for normal goods for INCOME inlastic?
0-1
How long should contracts periods be for NEDS?
1 year or less.
What is ICAEW's complaints procedure?
1) Conciliation - finding a practical solution, such as giving an explanation. 2) Investigation 3) Disciplinary proceedings 4) Appeal -- members & firms can appeal, involving the review committe and appeal committee.
What are Likets 4 CHARACTERISTICS of effective managers?
1) Employee- centred NOT work-orientated. 2) Set high standards but are flexible in terms of methods to use to achieve those standards. 3) Natural delegators with high level of trust. 4) Encourage participative management.
What is Tuckmans four stages of group development?
1) FORMING - The group is no more than a collection of individuals who are seeking to define the purpose of the group and how it will operate. 2) STORMING - This is the conflict stage. Preconceptions are challenged, such as norms of attitude & behavior. Members compete for chosen roles within a group. If successful, the team will be stronger knowing each other's knowledge and objectives. 3) NORMING- This Stage establishes the norms under which the group will operate. Members experiment and test the group's reactions to the norms when they are being established. It will show the openness, trust and behavioural patterns of the group. 4) PERFORMING- Final stage where the group can operate to full potential as all difficulties should have been resolved previously.
What are the two approaches to Human Resources Management?
1) Hard approach - Developed to meet the wider objectives of the business, to maximise employee effectiveness and control staff costs. 2) Soft approach - emphasises the human element of HRM. It is concerned with human relations and the development of individual skills and welfare of staff.
What are the 4 options of the Investigation committee if there is a case?
1) No Further action 2) Unpublicised caution 3) Refer to the Disciplinary committee 4) Consent to an order - financial penalty
What is the ..... of Divisionalised structure: - External environment? - Key building block ? - Key co-ordinating mechanism?
1) Simple static diverse 2) Middle line 3) Standardisation of outputs
What are Mintzbergs 5 types or organisational structure?
1) Simple structure 2) Machine Bureaucracy 3) Professional Bureaucracy 4) Divisionalised 5) Adhocracy/ Innovative (higher the number the more complex the structure)
What are Belbin's Team Roles?
1) THE LEADER - co-ordinating and operating through others. 2) THE SHAPER - Committed to the task, may be aggressive and challenging; will always promote activity. 3) THE PLANT - thoughtful / thought-provoking 4) THE EVALUATOR - Analytically criticises others ideas, bringing them down to earth 5) THE RESOURCE- INVESTIGATOR - not a new idea person, but pick up on other people's ideas and adds to them. Usually, a social person who often acts as a bridge to the outside world. 6) THE COMPANY WORKER - Turns general ideas into specifics; he/she is practical and efficient. Tends to be an administrator handling schedules. 7) THE TEAM WORKER - Concerned with relationships within the team; is supportive and defuses potential conflict situations. 8) THE FINISHER - unpopular, but necessary. Hr/she is the progress chaser to meet deadlines. There is an additional role 'the specialist' bought in from outside the team.
What is taylors 5 principles of scientific management (rational goal model)?
1) determine the one best way of doing a particular task 2) select the best person to do this task based on their mental and physical capabilities 3)train the worker to follow the set procedures very precisely 4) give financial incentives to ensure it is done 5) give all responsibly plan and organise the work to the manager, not the worker.
What is the planing and control system ?
1) objectives 2) plans and standards 3) actual performance 4) comparison of performance with plans/standards - this is where you identify the deviations 4a) any deviations found In 4, will require a control action in 2 &/or 3. 5) on target - no corrective action required if there's no deviations.
What are the 3 main elements of a product?
1)Basic product - a car 2) actual product - a Ford Focus 3) Augmented product - Ford Focus with 0% finance and extended warranty.
What are the 3 things which promote ethical culture?
1)Ethical leadership from the board of directors 2) Codes of ethics or business conduct 3) Policies and procedures to support ethical behaviour.
What are the 4 STAGES of the risk management process?
1- Awareness & identification 2- Analysis and measurement - probability of it happening, Gross risk is the probability and impact of the risk 3- Response and control 4- Monitoring and reporting
What are Kotlers four types of competitor?
1- Brand competitor 2- Industry competitors 3- Generic Competitors 4- Form competitors
What are Fayols 14 principles of management?
1- DIVISION OF WORK - allocated rationally, based on specialisation . 2- SCALAR CHAIN- Authority flow vertically down. 3- CORRESPONDENCE OF AUTHORITY AND RESPONSIBILITY - officer should have enough authority to carry out the responsibilities given. 4- APPROPRATE CENTRALISATION - Decisions taken at the top. 5- UNITY OF COMMAND - order from 1 boss only 6- UNITY OF DIRECTIOM - One head & plan for each activity 7- INITIATIVE - by employees within their authourity. 8- SUBORDINATION OF INDIVIDUAL INTEREST - interest of business before personal interests. 9- DISCIPLINE 10- ORDER- where they are supposed to be. 11 - STABILITY OF PERSONNEL - continuity of employment 12- EQUITY - Policies should be just 13- REMUNERATION - Rewards fair 14- ESPIRIT DE CORPS - Harmony and teamwork to promote discipline and contentment.
What are Likets four basic leadership styles for authority?
1- Exploitative authoritative 2- Benevolen authoritative 3- Consultative 4 - Participative.
What are the 4 key risk concepts which scale any risk?
1- Exposure- business is faced by risk due to their nature 2- Volatility - the factor to which it is eposed is likely to alter - aka weather in UK compared to spain 3- Impact - amount of loss if the risk happens 4 - Probability - the likelihood of it happening
What are the primary activities of Porters value chain model?
1- Inbound logistics 2- Operations 3- Outbound Logistics 4- Marketing & sales 5- Service
What are Porters 5 forces for a competitive environment?
1- Rivalry among existing competitors 2- Threat of New entrants 3- Bargaining power of buyers 4- Threat of substitutes 5- Bargaining power of suppliers
What are Kotlers 4 competitor reaction profile?
1- TIGER - aggressive 2- SELECTIVE - reacts to some threats but not all 3- STOCHASTIC - unpredicable 4- LAID BACK - does nothing
What is Maslow's hierarchy of needs?
1. Basic/Physiological needs 2. Safety and Security needs 3. Social and Belonging Needs 4. Self esteem/ Status/ Ego 5. self actualization It does not mention money & shows the significance of non-financial motivators. But he did see that money is important at satisfying basic/ safety needs. But is only imporant for ego if your buying things such as expensive cars etc.
What is duopoly?
2 suppliers control prices. There is often temptation for collusion
How long do you have to appeal a DC decision?
28 Days
How many NEDS does an audit committee need?
3 , but 2 for a small company
How many years does a Ned have to not be employed for to be independant?
5 years
How long can a Chair be in power?
9 years
What are the 4 phases of the business cycle ?
A - Recession B- Depression C- Recovery D- Boom
What is step B of the business cycle?
A Depression, which is when a recession is pro-longed & there is no stimulus in demand.
What is ethical culture?
A business culture where the basic values and beliefs in a company encourage people within the company to behave in line with acceptable business ethics.
What is a B2C market ?
A business which operates in the consumer market, selling to consumers. "Business to consumer"
What is business resilience ?
A business's ability to manage and survive against planned or unplanned shocks and disruptions to its operations.
What is a bankers draft?
A chq drawn by a bank on one of its own bank accounts.
What is a group ?
A collection of people with the following things: - Common sense of identity - Common aim or purpose - Existence of group norms - Communication within the group -The presence of a leader
What is a business system?
A collection of people, machines, and methods organised to accomplish a set of specific functions.
What is Webers definition of a Bureaucracy ?
A continuous organisation (not disappear if people leave) of official functions (divided into areas with specified duties) bound by rules (defines and specifies the course of action that must be taken)
What is a letter of credit?
A document issued by a bank on behalf of the customer, authorising a person to draw money to a specified amount from its branches or correspondents, usually in another country, when the conditions of the document have been met.
what is The competition an markets authority (CMA) ?
A government body responsible for promoting effective competition markets across the uk economy, with complimentary consumer protection role.
What is a stakeholder?
A person or group of persons who has a stake in the organisations.
What is the definition of accountability ?
A persons liability to be called to account for the fulfilment of tasks she has been given by persons with a legitimate interests in the matter.
What is placing shares?
A placing usually involves offering your company's shares to a selected base of institutional investors
What is an ethical audit?
A process which measures the internal and external consistency of a companies value base.
What are 'normal goods'?
A rise in income will increase demand for a particular good.
What is a system?
A set of interating componants that operate together to accomplish a purpose.
What is an organisation ?
A social arrangement for the controlled performance of collective goals, which has a boundary separating it from its environment.
What is the definition of a database?
A structured collection of records or data that is stored in a computer system along with rues as to the information that will be sought from it, so that quieries maybe answered by interrogating the database.
What is the synonym for good information?
ACCURATE
What is the synonym for qualities of infomation systems security?
ACIANA
What is an alternative investment market?
AIM is a sub-market of the London Stock Exchange
Who can make a complaint to ICAEW's professional standards departments ?
ANYONE
What is the organisational iceberg?
Above the waterline: OVERT - Formal aspect. Customers, technology, organisation design, rules and regulations. Below the waterline: COVERT - Behavioural aspects. Attitudes, communication patterns, informal, personality & conflict, politics etc.
What is reward power ?
Access to or control valued resources. For example, power over contacts and financial awards for team members.
What are the qualities of good informations ACCURATE ?
Accurate Complete Cost- beneficial User-targeted Relevant Authoritative Timely Easy to use.
What is a Key performance indicator?
Achievement of which will mean the business can outperform rivals, you do this by benchmarking.
What is interpersonal manager role ? (Mintzberg)
Acting as leader for his own team and linking with the mangers of other teams. For example a manger representing his team at a conference with other managers.
What is the codes & standards division for the FRC?
Actuarial policy - helps to promote actuarial standards & high quality actuarial practice. Audit & Assurance - Standards & ethical standards Accounting and reporting policy- amends accounting standards Corporate governance- maintains & updates 2 codes, corporate governance & stewardship code.
What is the mission of any IT function?
Add persistent value, through effective application of appropriate technologies. You must: - Be aware of IT possibilities. - Plan in-house IT activities - Distinguish between IT service delivery and IT service support. - Consider outsourcing IT - Innovation and investment in IT service development. (avoid being left behind)
What are treasury bills?
All UK Treasury bills are sterling denominated unconditional obligations of the UK Government with recourse to the National Loans Fund and the Consolidated Fund. SAFE
What are Critical Success Factors ? (CSF's)
All business's are difference. It maybe Price, delivery etc. Its concern is the resources and the competitive environment in which it operates. For example Amazon doing next day delivery.
What are information systems ?
All systems and procedures involved in the collection , storage , production and distribution of information.
What is the long run?
Allows suppliers long term equipment to be altered. New suppliers can enter the industry in the long-run
What is business angels?
An angel investor is an individual who provides capital for a business start-up, usually in exchange for convertible debt or ownership equity.
What is an investment in equities?
An equity investment is money that is invested in a company by purchasing shares of that company in the stock market. RISKY
What is inflation?
An increase in price levels generally & a decline in the purchasing power of money.
What is a strategic alliance?
An informal, WEAK contractual agreement between parties or a minority cross shareholding (Each party takes a small number of share in the other parties). No seperate company is formed. - The arrangement is easier to break - May conravene competition laws - Less commitment so the benefits are not as great.
What is a unit trust?
An institutional investor, along with pension funds and insurance companies.
What is a decision support system?
An interative software based system that help make decisions & compile raw data, opinions, knowledge or business analytical models . It is to help identify the problem and make decisions. This is when the decision making is unscructured or semi-structured , so its hard to see what the decision will be.
What is a business ?
An organisation that is orientated towards making a profit for its owners so as to maximise their wealth and that can be regarded as an entity separate from its owners.
What is the Technostructure of Minztbergs building blocks?
Analysts determine and standardise work processes and techniques. Planners determine and standardise outputs Personnel analysts standardise skills.
What is the Support staff of Minztbergs building blocks?
Ancillary services such as HR, legal counsel, cafeteria, security. They do not plan standardised operations. They function independently of the operating core.
What are cost drivers?
Any activity that affects the cost of a product or service.
What is a cyber risk?
Any risk of financial loss, disruption or damage to the reputation of an organisation from some sort of failure of its information technology systems.
Who is a secondary stakeholder ?
Anyone other than the shareholders. Customers Directors Lenders Government Environment Local community etc
What is a product ?
Anything that can be offered to the market for attention, acquisition, use or consumption that might satisfy a want or need.
What does the London stock exchange require premium listed companies to do?
Apply the UK corporate governance code & to include it in their annual reports a statement of complience. Departure from complience with certain supporting principles maybe jsutified, they must make a disclosure statement.
What is Internal analysis?
Appraisal of business's STENGTHS AND WEAKNESSES
What is external analysis?
Appraisal of the business's OPPORTUNITIES & THREATS
What is a model?
Are used in management theory to represent a complex reality, such as a client business. It is analysed and broken down into constituent parts. Looks like a flow diagram.
What are the 3 business risks & the definition of a business risk?
Arises from the nature of the business, its operations, and the conditions it operates in. Strategy risk - Failed decisions Product risk - Failed product Enterprise risk - reputation ?
Who can be part of the remuneration committee?
At least 3 NEDS (2 for a SMALL company) Chair ONLY if he is independent and he CANNOT chair the whole committee.
What is a SWOT resource-based appraoch ?
At the first stage of the strategy making process, seeking to establish the nature of the business's core competnces before deciding what the objectives of strategy should be.
what are Smart contracts ?
Audit of smart contracts can take place as they are being created , before transactions under it occur. These are self-verifying & invoke automatic executions of defined rules to securly hold and transfer lega lirlw to an asset, including how to account for it so cost & revenue is recognised by the teo parties.
What 3 things INFLUENCE the effectiveness of a manager?
Authority - having sufficient rights and control. Autonomy - giving subordinates necessary freedom to carry out their roles. Leadership - exercising power in such a way that creates a willing and positive response from subordinates.
What is a functional manager?
Authority in certain areas of another department.
What are the 6 qualities of a secure information system ACIANA ?
Availabiity Confidentiality Integrity Authenticity Non-repudiation Authorisation
What is McGregor's Theory X?
BAD WORKER - Individuals dislike work and avoid it where possible. - They lack ambition, dislike responsibility and prefer to be led. - A system of coercion, control and punishment. - the individual desires security.
What are the two regulatory bodies that oversee the financial services industry?
BANK OF ENGLAND - Prudential Regulation Authority PRA INDEPENDANT - FCA - financial conduct authority.
What are the limitations of financial information?
Backwards looking - already ended Conventional representation - standardised & highly aggregated which limits usefulness Omission of non-financial info - such as narrative operations.
What is the stakeholders perspective on corporate governance?ALIGN THE INTERESTS OF SHAREHOLDERS WITH OTHER STAKEHOLDERS
Balance between economic and social goals and between individual and communal goals. Need to encourage efficiency Accountability of senior management Align the interests of shareholders & companies with thosse of other stakeholders.
What Monetary policy ?
Bank of England lending a base rate to its Monetry policy committee. The MPC selects its base rate in order to meet its inflation target set by the Chancellor of exchequer.
What is protectionism?
Barrier to international trde against foreign competition by Tariffs, custom duties or import quotas (restricted quantity allowed in)
What is expert power ?
Based on experience, qualifications or expertise.
What is referent power ?
Based on force of personality or charisma , which can attract and influence others.
What can you do to minimalise credit risk?
Bills of exchange Letters of credit Export credit insurance.
What is a distributed ledger technology?
Blockchain (Bitcoin) - Public distributed ledger. No centralised storage as it is replicated and shared across multiple organisations. It is a collection of records linked with eachother and strongly resistent to alterations & accurate. People can be strangers & you can trust it.
What are Distributed Denial of Service attacks?
Bring down a business's website by overwhelming it with information.
what is the strategy for a star product?
Build
What is an agency problem?
Business Managers often lose sight of- -Whom they are seeking to benefiyt - The fact they should not harm others.
What are sources of finance for a growing business?
Business angels Venture capitalists Alternative investment market Crowdfunding
What is a the Baumol revenue maximisation theory?
Business's after to maximise revenue rather than profit in order to maintain or increase its market share, ensure survival, and discourage competition. Managers benefit from the prestige and benefits such as salary for running a bigger company.
What is a cartel?
Businesses agree to not compete with eachother. You can get criminal sanctions.
What is self-regulation?
By the profession/industry itself . IT is a common sense approach as there is detailed knowledge within the profession of the issues facing it.
What is the synonym for information processing ?
CATIVA
What is a Crises?
COVID 19 An unexpected event threatens the wellbeing of a business , & a significting risk becomes a reality.
Where can a treasury bond be sold ?
Capital market or secondary market.
What are the two types of unstructured data ?
Captured data - created passively from an unrelated activity & captured without a purpose. User-generated data - Data which the internet users create and voluntarily place online (Twitter)
What is an expert system?
Captures human expertise in a limited domain of knowledge for users to benefit from expert knowledge. It will be a database with set rules on how to follow. For example the NHS website on symptoms & tell you whether to ring the doctors or go to A&E etc.
What is the BCG Matrix?
Catergorising products based on their market growth rate & relative market share. It consists of Stars, cash cows, dogs & question marks
What is the informational manager role ? (Mintzberg)
Checking data received and passing it on to the relevant people, as well as being a spokesmen for his team in relation to other teams or his own manager.
What is a primary bank?
Chq accounts, chq clearing & provide internet banking services. They are commerical, retail clearing banks
What is Porters generic competitive strategy?
Closes the gap in the market. Cost leadership - Producing the lowest costs in the industry Differentiation unique - Product or service in the industry where it is believed to be unique. Focus (Niche)- Restriction of activities to only part of the market, bu either cost focus or differentiation focus.
What is transaction process system?
Collect, stores,, performs & processes routine transactions such as sales order.
What are Harvards 4 "C's" Model of Human resources management?
Commitment - Employees motivation, loyalty and job satisfaction. Competence - employees skills, abilities and potential. Congruence - The extent that managers and employees share a common vision. Cost - effectiveness - Operational efficiency and productivity. i.e labour cost compared to competition.
What is promotion ?
Communication, thus informing customers about the product and persuading them to buy it. You do this by adverts, sales promotion, public relations and personal selling.
What is the public policy perpective on corporate governance?
Company meets the objectives of its shareholders, plus the interest of stakeholders & the public @ large.
What is Ansoffs Matrix for product/market strategies.
Comparing new&existing products, and Current & new markets. 1- PROTECT & BUILD- (existing market & existing product). Consolidate, loyalty schemes, withdraw. 2- PRODUCT DEVELOPMENT - New product in exisiting market. 3- MARKET DEVELOPMENT - (New market, same products) New segment, new users. 4- DIVERSIFICATION - New market & product, most risky.
What is Audit analytics & intelligent systems?
Complete checks on data and allow 100% of transactions to be audited on a continuous basis. Can also be used for internal audit
What are management information systems ?
Computer based system that converts transaction data systems (internal) into summarised reports, allowing managers to run their departments effectively. Middle management for routine decisions. It reports on existing operations, is not flexible and has little analytic abilities.
What are intelligent systems ?
Computer based systems that represent , reason about and interpret data. They analyse data to learn about a structure of and patterns within the data to devise strategies and identify behaviours required. Such as SIRI & Netflix.
What is Artificial intelligence ?
Computers carry out tasks such as learning, knowing, sensing , reasoning , creating , understanding. Such as ROBOTS
What happens at the appeal committee?
Consists of 5 peoples, 3 chartered accountants, one non-accountant, and a chairman who holds legal qualification. - if it is overturned - ICAEW pay the costs - If it is unsuccessful the AC may order the member to pay any additional costs.
What is the Middle line of Minztbergs building blocks?
Conveys the goals set by the strategic apex and CONTROLS the work of the operating core in pursuit of the strategic apex goes. These are middle & first line managers.
How would you measure profitability?
Cost & revenue
What is a market-based system?
Countries where markets are a more important source of finance rather than bank finance, such as the UK & the USA. Household will have a high risk appetite to invest in equity & theres less government regulation. The banks & business relationship are not significant, for example there is no holding in equity & the banks are not a party to decision making.
What is import substitution?
Country aims to produce goods which it previously imported. It protects local producers.
What is operations management?
Creating as required, the goods or services that the business is engaged in supplying to customers by being concerned with the design, implementation and control of the business's processes so that inputs (materials/labour etc) are transformed into output products and services
How would you manage a crises?
Crises prevention Contingency planning,
What is an example of a back up generator for a hospital?
Crisis management
What is the difference between a customer and Consumer ?
Customers purchases and pays for the good. The consumer is the USER of the good.
What is information processing ? and what are the 6 criteria it should meet?
Data collected is converted into information communicated widely within the office. CATIVA 1) Completeness 2) Accuracy 3) Timeliness 4) Inalterbility 5) Verifiability 6) Accessibility (open to scrutiny)
What is structured data ?
Data obtained for a particular purpose in mind, so it has a structure derived from the way in which it was collected, typically from website clicks or particular actions.
What is Data science?
Deals with collecting, preparing , managing , analysing, interpretating large and complex datasets, extracts value from data.
What are the two things IASB conceptual framework states financial info should influence?
Decisions of users of the info and establish management accountability. Information to influences decisions must show it is RELEVANT
What are inferior goods ? aldi baked beans
Demand will rise with income, but only up to a certain point. But then it will fall as income rises beyond that point.
What are veblin goods ?
Designer, so the higher the price tag, the more desirable it is, therefore demand increases.
What is a business strategy ?
Determine how competetive advantage is gained by a particular SBY & how the marketing mix must be adjusted to this.
What is product-market strategyies?
Determine where it competes and the DIRECTION of growth
What is corperate strategy ?
Determined at main board level for the business as a whole. They deal with the overall business..: - Corporate mission and objectives - Product/marketing decisions - Major investment decisions - Overall financing decisions - relatons with external stakeholders
What is a functional strategy?
Develop business strategy for SBU as it affect the - marketing function - Production function - HR function - Finance function
What is the difference between differentation and differenation focus?
Differentation is for a product to be unique, a differentation focus , a FOCUS is a niche, providing a differentiated product or service to that SEGMENT
What is Distributed denial of service?
Disrupts online services by overwhelming the website with wave of traffic that the systems is unable to handle.
What is a relative market share?
Dividing an entities sales in a specified market / by the sales of the biggest competitor in that market. If it is MORE THAN 1 than the entity sis a market leader & high market share, if it is below 1 than it is a low market share.
What are Heizberg Hygeine factors?
Doesn't motivate you, but if it is bad it can demotivate you. - Company policy - Supervision - SALARY - Relationship with other staff - Working conditions.
What is a two tier board?
Dual/supervisory board structure. 1) The management board, manages the company and has similar powers to the unitary board 2) The supervisory board: Independent seperate board elected by shareholders & employee. Has the power to: - Appoint & remove members of the management board - request info from members of the management board - inspect books & records - Performs independent reviews.
Are luxary goods elastic or inelastic?
Elastic
What is Value drivers?
Elements of a product or service and activities tha INCREASE THE AMOUNT OF VALUE CONSUMERS PLACE ON IT. This includes branding and differentiating from competition, such as Nandos and any normal peri peri place.
What are downstream supply chain members?
Elements of the supply chain which are involved AFTER the product has been manufactued or service provided.
What is the Strategic Apex of Minztbergs building blocks?
Ensures the organisation follows its mission & managers the organsation with the environment. These are the TOP managers.
What are the 4 ways a business can respond to regulation?
Entenchment - nil response Mere complience - met simply passing on the cost of complience to clients Full complience - products adjusted to regulations & peoples behaviour has changed Innovation - behaviour exceeds regulation - porters hypothsis
What is a business financed by?
Equity & debt
What are the key characteristics of a system?
Evironment- can't control, has considerable influence. System boundry- seperates Info systems from its environment. Input--->processing---> Outputs
What happens when the rate of inflation begins to increase?
Expectational inflation occues, this can lead to a vicious cycle of a WAGE-PRICE spiral, where inflation becomes a permanent feature & peoples expectations that will occur
What is elasticity?
Extend of a change in demand / and or supply given the change in price.
Is market research internal or external sources?
External
Is research and development from external sources or internal ?
External
What is open systems culture ?
External environment provides opportunity, but it is ever-changing and unpredictable. Business's must be flexible, open to new ideas and adapt. Staff are motivated by growth & creativity. For example new changing technology. They look st flexibility and outward looking.
Who has the power to regulate the audit profession?
FRC
What are debt holders?
Face LOWER risk but LOWER return. Rec interest before dividends - think of it in law.
What are knowledge work systems?
Facilitate the creation & integration of new knowledge into an organisation - I.e, in the hospitals sending round a photo of a patient with a new virus.
What is deflation?
Falling prices generally, which is normally associated with low rates of growth.
What is masculinity v femininity?
Feminine: Intuitive, consultative style, olicies on quality of life, balance & gender diversity on boards. Masculine: Aggressive , hard-decision making style, focuses on money & achievements, with diversity less advocated.
What are examples of regulators ?
Financial reporting council & Financial conduct authority
What are the two non-business risks?
Financial risk Operational risk
What are the support activities of Porters Value chain model ?
Firm Infrastructure HR Technology development Procurement
What are the two main causes of demand pull inflation?
Fiscal - increase in government spending OR reduction in taxes Credit - Credit is extended to customers increase, due to a decrease in interest rates, expenditure rises.
What does the software controls & data sets have as an impact of auditing ?
Focus on validating the controls within the software & interprets comple data sets.
What does the 'Board Leadership & company purpose' section of UK corporate governance code contain?
Focus's on the overall role of the board. The overall purpose, values & strategy of the business For example - The board should have long-term value - The board should monitor culture - Chair should seek regular engageent with major shareholders
What is the section of 'Composition, succession & evaluation' of the corporate governance UK code?
Focus's on the work of the moninations committee to appoint new directors. Also, that ALL directors are subject to annual re-election and the board and its committee are subject to an annual performance review.
What is market failure?
Free market mechanism fails to produce the most efficient allocation of resources.
What is business strategy?
From in Strategic business units, relate to how a particular market is approached, or how a particular SBU act.
What is the international federation of Accountants ?
GLOBAL organisation for the accountancu profession, with 175 members, ICAEW is one of them. They protect the public interest and it includes: - Practise guidance - Membership complience programme. - Strong international economies - Convergance - Encourages worldwide to adhere to the fundamental principles.
What is Mcgregors theory Y?
GOOD WORKER - Physical and mental effort in work is as natural as rest or play. - Commitment is driven by rewards - self actualisation - External control and threats are not the only way achieve objectives, self-control and direction are very important. -People learn to like reponsibility -The intellectual potential of the average human is only partially utilised. It needs to develop further.
What is the number for luxury goods for income elastic?
GREATER than 1
What is the definition of management ?
Getting things done through other people (Stewart)
What is the definition of delegation?
Giving subordinate responsibility and authority to carry out a given task; while the manager retains overall responsibility.
What is rational goal culture ?
Goal- orientated towards external requirements. Structures and controlled so as to deal effectively with the outside world. Competition and the achievement of goals motivate staff. Eg large established business's. Look at control and outward looking. You look at why the business is doing these things.
What is allocative efficiency?
Goods are wanted by buyers are produced in optimum quantities. Resources are allocated in a way that it is impossible to re-allocate factors of production to increase overall benefit.
What is the 'boom & bust cycle'?
Government try to stabalise the system and avoid a fluctuating cycle. in a recession they will BOOST overall DEMAND In a boom, they will dampen demand through rising taxation or interest rates & by reducing public expenditure.
What does GDP stand for ?
Gross domestic product, where you have a factor of production in which you get the enjoys of a return. It equals the amount of expenditure by consumers, government & foreign buyers.
What is organisational structure ?
Grouping people into departments or sections and the allocation of responsibility and authority, organsational structure sets out how various functions are formally arranged.
What is a staff manager ?
Has authority in giving specialist advice, even for another department where they have NO LINE AUTHORITY. For example a HR manager giving advice to another manager.
What is a line manager ?
Has authority over a subordinate. Consider a production manager with authority over a production line worker.
What is a project manager ?
Has authority over project team member's. This is often temporary and the employees will likely have line managers who also have authority over them.
What is a functional manager ?
Has functional authority whereby authority is present to control performance in another department. For example a finance manager asking for timely reports from other departments.
What is tactical information?
Helps people deal with SHORT TERM issues & opportunities, e.g monthly varience reports
What is planning information?
Helps people involved in the planning process
What does data analytics have as an affect on audits?
Helps to target risk & improves relevance of audits.
What is high & low Power distance?
High - encourages bureaucracy and respect for authority and a persons rank in an organisation. The power should be concentrated in a small group, so there is less independent NEDS and less seperation of CEO's & Chairmen. Low - Encourage flatter oragnisational structure, more value placed on responsibility & autonomy. They will have more independent NEDS & seperate out the roles of CEO & Chairman.
What is the difference between higher levels of uncertainty avoidance & lower?
Higher levels of uncertainty avoidance: Lower levels of risk & seek the protection of rles, analysis of data & establishment of riles & reponsibilities. Low levels: Tolerate high levels of risk & will take chances.
Risk seeking attitude?
Higher risk but a higher expected return
What is indulgence V restraint?
Highly indulgent: Personal gratification of basic & natural human drives, such as enjoying life & having fun. This has less restrictions on spending Restraint: Suppress personal gratification & place more regulationof peoples conduct & behaviour & spending.
What is the definition of business sustainability ?
How far a business can operate in a sustainable way, and how it should interact with individuals and government in doing so.
What is Medelow's power/Interest Matrix?
How informed you keep your stakeholders based on their interest & power. Category A- Minimal effort (Low power, low interest) Category B- Keep informed (Low power, high interest) such as everyday employee. Category C- Keep satisfied (High power, low interest) Government. Category D- Key player (High power, high interest) - Banks, shareholders etc.
What is the division of responsibilties as a section of the UK code of corporate governance?
How the board should be organised and the roles of the chair and the executives & the NEDS. It also explains how the board should be supported by the company secretary.
What is Herzberg content theory of Hygiene and motivating factors ?
Hygiene - CONTEXT of the job. It looks at: - Company policy - Supervision - Salary - Relationship with other staff - Working conditions. Motivating - CONTENT of peoples job to ensure motivation. - A sense of achievement - Challenging work - Reponsibility - Advancement -The Job itself.
When is a product eleastic?
IF it is GREATER than 1
What are the stages of strategic planning?
IN ORDER 1- Either internal/external analysis 2- Corporate appraisal 3- Mission, goals & objectives 4- Strategic choice 5- GAP 6- Strategic implementation.
What is the Consultative committee of Accountancy Bodies?
IS all the UK accounting bodies together which has 5 members - ICAEW ICAS (Scotland) ICAI (Ireland) ACCA CIPFA (Public finance & accountancy) It allows the profession to all speak in one voice.
What is a bill of exchange?
IS drawn by one party on another - not neccesarily a bank
what is perfect competition (FREE MARKET) advantages?
IT is efficient and resource allocation is quick They are impersonal, there is no central planning for prices.
When is a product inelastic?
If it is less than 1
What are internal economies of scale?
If you produce goods at a low unit cost. So you dont allocate these savings to other things, they do not do it efficiently. Internal is - specialisation of labour - Division of labour - Specialised machinery -Buying economies - Indivisibility of operations - Holding inventory
What are the 2 benefits of industrialisation?
Import substitution Export led growth
What is the Shareholder-led approach to governance structures?
In the UK& US, a greater role of shareholders in governance structures, as it is a market-based system. The insitutional shareholders have a very high investment in the shares of leading companies.
What are Office Automation systems?
Increase the productivity of data and information workers. (for example helps with admin work to reduce time-consuming activities)
What is the fiscal stance that is expansionary?
Increased borrowing and spending.
What is the fiscal chance of neutral?
Increased taxation and spending
What is the fiscal stance of contractionary?
Increased taxation but no increase in spending
What is income elasticity of demand and what it the equation for it?
Indication of the responsiveness of demand to changes in HOUSEHOLD INCOMES Change in quantity % / Change in income %
What is individualism v collectivism?
Individualism: encourages debate & expression of peoples own ideas, supporting a diverse mix of directors. Collectivism: Maintain harmony, less liekly to support strong, diverse opinions as a means to avoid arguements.
Are cigarettes & alchohol elastic or inelastic?
Inelastic as they are addictive
What is the balanced scorecard?
Integrated set of performance measures linked to the achievement of strategic objectives. IT has 4 perspectives, - Customer- how do they see us? - Innovation & learning - How can we evolve? - Internal business processes- What must we excel at? - Financial- how do we look to our shareholders?
What is the monetary policy & aggregate demand?
Interest Rates- When they increase the effects are: The price of borrowing will rise Companies will REDUCE investment Households will REDUCE consumption Exchange rate will INCREASE There will be CAPITAL INFLOWS as foreign investors will be attracted to the sterling The reductions on spending will reduce aggregate demand in the economy.
What is the internet of things?
Interrelated computer devices with the ability to transfer data over a network without requiring human-to-human or human-to-computer interaction
What is the clearing mechanism?
Interval between when amounts are paid into the bank and when they can be drawn. I.e CHAPS & BACS etc.
What do we need long term finance for?
Inventory, recievables, non-current assets.
What is a risk neutral attitude?
Investment is chosen according to its expected return, irrespective of the risk.
What is a risk averse attitude?
Investment is more certain but possibly a lower return
What are venture capitalists and what do they do ?
Invests in business's with high growth potential. They do sit on the board. They realise their investment by selling their shares following flotation on the stock exchange. Expect existing owners to bear a substantial part of the risk.
What is human relations culture ?
Inward-looking, maintains the well-being of staff. Staff are motivated by a sense of belonging. For example support service units. This looks at inward looking and flexibility.
What is strategy?
Is a course of action, including specification of the resources required, to achieve a specific objective.
What is an export guarantee?
Is insurance against defaults on exports.
What is marketing orientation ?
Is one which accepts the needs of potential customers as the basis for its operations. It's success is seen as being dependent on developing and marketing products that satisfy those needs. SATISFY CUSTOMER NEEDS.
What is agency theory?
Issue from conflicts between shareholders and managers of the company, as ownership & control are seperated.
What is macroeconomic environment?
It incorporates - National influences, such as exchange rate, interest rates, government policies etc. Global influence - Internationalisation of trade, EU
What happens if there are other factors affecting the demand curve?
It is called a shift of the demand curve. if demand rises then the curve moves to the right, if it falls then it goes to the left.
What is financial intermediation?
It is how banks operate. Lenders give money to the 'intermediary' (bank) to which they give the money to borrowers. They provide advice and information to investors on financial opportunities & their risks & returns, they also reduce investment risks.
What is the definition of an operational risk and what are the 4 types?
It is non-business, the risk that actual losses incurred because of inadequate or failed internal processes, people of systems or because of external events. - Process risk - People risk - Systems risk (IT) - Event risk (COVID19)
What is a mission statement ?
It should answer What is our business? What is our value to the customer ? What do we want our business to become ? What should our business be ?
Will increased government spending increase or decrease GDP ?
It will increase GDP.
What is the SWOT positioning-based apprach?
Kind of summary or synthesis of our prior examination of resources & environment. Important to do a STAKEHOLDER analysis.
What are 4 examples of the GDP four factors of production & what is there return?
Land = rent Labour = wages Capital = interest Entrepreneurship = Profit
What is a Tall business?
Large number of levels in its management heirachy, this is from narrow spans of control.
What type of company has a Machine bureaucracy structure?
Large, old, regulated firms - traditional For example Wilkins Kennedy. - Simple Static environment - Functional Structure (verticle)
What is governance structure?
Legal or regulatory methods put in place in order to ensure effective corporate governance. The two are -STATUTES - CODES OF PRACTICE Different countries differ whether they are principle based or sharholder-led approach to governance structures.
Local authority deposits ?
Lending money to a UK local government authority. SAFE
What is the primary focus for suppliers?
Liquidity
What are the types of financial risks?
Liquidity risk - cash Gearing risk- Too many debts Credit risk - Customers don't pay you Market risk- UNCONTROLLABLE - exchange/interest rates
What are examples of capital markets?
London stock exchange AIM
What is the difference between Long term & Short term orientation?
Long term orientation: Long term thinking, resulting in restrictions on short term bonuses & gives reward based on long term performance such as share option. short term orientation: Short term view of appraisals and rewards, theytend to be a period of a few months such as profit related bonuses.
What is the internal process culture ?
Looks inwards, stable/controlled internal environment. Goals are knowss and unchanging. Security and stability and order motivate staff. For example the public sector. Look at control and inward looking.
What are question mark products?
Low market SHARE High market growth - Need to be watched, have the potential to be either dogs or stars as you can't determine if they will be successful - i.e new technologies.
What are the 9 'M's' needed in a resource audit?
Machinery Make-up- culture, structure Management Management Information Markets Materials Men & Women (number,skills, wage cost) Methods Money
What is Automation?
Machines that carry out the tasks of workers, so workers are no longer needed. For example to monitor production etc.
What is a functional (operational) strategy?
Main functions within each strategic business units, such as productions/operations, HR and marketing, and how they deliver effectively the strategies determined
What controls is reponded by restructuring?
Management controls
What is monopolistic competition?
Many buyers & sellers some differentiation of products rely on branding/advertising - rely on customer loyalty, such as pubs & hairdressers
What is Market segmentation?
Market broken down into many sections
What is the corporate perspective on corporate governance?MAXIMISE WEALTH OF SHAREHOLDERS BUT MUST FOLLOW RULES OF SOCIETY
Maximise the wealth of shareholders, as long as it conforms to the rules of society. Must achieve a long-term sustained value for shareholders.It will want to exceed with ALL stakeholders. Not just shareholders.
What if a complaint is very serious and already in the public domain?
Maybe referred straight to the FRC's Conduct division for investigation.
What is the definition for effectiveness?
Measure the organisations performance in acheiving goals and targets.
What is the definition of economy?
Measured by the success of the team or work group in controlling costs
What is ICAEW's possible threats to an organisations cybe-resilience?
Mobile threats- mobile devices stolen/lost Networking and cloud considerations - Users working remotely or via the cloud cannot access organisations systems. Access controls in the mobile world Other threats - attacks on company websites, email , social media etc.
will more substitutes make an item more or less elastic?
More elastic
What is the number for inferior goods for income elasticity?
NEGATIVE numbers
Can the Chair be part of the audit committee?
NO
Can a member of the tribuneral be an officer or employee of any of the accy bodies or FRC?
NO, has to be independant
What is the stewardship perpective on corporate governance? ALL ABOUT THE COMPANY
Narrow minded- Law requires the directors to act in the best interest of the company.
What ways can a business get finance access?
National stock exchange - Primary (New share issues) & secondary. The banking systems - retail market / wholesale market Bond markets Leasing Debt factoring - (smaller companies) International markets.
What are the 4 types of crises?
Natural event: eg earthquake Industrial accident: fire Product or service failure: faulty & dangerous goods Public relations disaster: unwelcomes media attention
Does an organisation chart show the degree of decentralisation ?
No
Is complience with the UK Corporate Governance Code a legal requirement?
No
can you be chair & chief exec @ the same time?
No
How long does the code remommend service contracts should be?
No more than a year.
What unstructured data?
No structure and no particular objective.
If the Investigation committee have a complaint, where the members say it is valid, can they get an unpublised caution?
No, as it is valid. They must get a fine.
if interest rate is fixed, can it be a floating rate note?
No, as its fixed.
Does a premium listed company have to apply with ALL requirements of the code?
No, it can be flexible and a either choose comply or explain. The size of the business does not matter.
Does the annual report state a company has to show its business model, but objectives are confidential?
No, it is recommended, but it doesnt have to.
Does saying a 'reasonable time' found as the T is Smart?
No, it must be a specific time frame.
Are low costs and high sales always critical success factors?
No, not ALWAYS. Some business may choose not to operate that way.
Is there a legal requirement for an accountant to be paid-up member of any professional body at all?
No, you do not have to be a member to be an accountant.
Do premium listed companies always have to adhere to every requirement?
No. As long as the ones not adhered to have an explanation with them.
Does the type or work determine whether an organisation is profit orientated or not-for-profit ?
No. For example a private school can be profit orientated.
Can you delegate accountability?
No. only responsibility.
How would you measure activity?
Number of orders from customers = effectiveness of marketing Number of machine breakdowns attended to by repairs & maintenance.
What are the rules of the NEDS in division of responsibiities on the UK governance code?
OVER half the board, EXCLUDING the chair should be NEDS. NEDS have a prime role of removing/appointing executive directors. They have to scrutinise & hold account the performance of management
What are form competitors?
Offer different products that satisfy the same needs, matches & lighters
What ways can you obtain new london stock exchange listing of shares?
Offer for sale Placing Offer for subscription.
What is oligopoly? SAINSbURYS AND TESCO
Oligopoly - There are few sellers but many buyers. - Product differentiation - High degree of mutual interdependency Often compete by non-price competition Price- cuts are copied, price increases are not always copies.
What is centralisation?
One in which decision making authority is concentrated in one place, the strategic apex.
What is monopoly?
One supplier who has complete control. They have many buyers & there are lots of barriers from entering. They can set the selling price and determine the quantity supplies, they can earn supernormal profits. often extensive regulation as they are not consumer friendly.
For Belbins team workers to be effective - how many of each do you need ?
Only one: Leader Shaper Finisher The rest should be an equal amount.
What does the Institute of Business Ethics identifies the following attributes & behaviours of ethical leaders?
Openness- open minded & willing to learn Courage -determined & direct, stamp out poor behaviour Ability to Listen Honesty Fair mindedness
What is supply chain management ?
Optimising the activities of businesses working together to produce goods and services. You shoud have: - Joint problem solving among supply chain partners - Early supplier involvement in product development - Reducion in customers served to focus on customers of high potential value.
What is the difference between an Mechanistic business (bureaucracies) and an organic structure?
Organic business's, think of these as 'new'. They are flexible and adaptive. Mechanistic are stable, efficient and slow-moving. Think regid like a robot.
Who are institutional shareholderS?
Organisations which invest money on behalf of other people. In the UK it is: - Ins companies - Pension funds - Investment trusts. They often enter into a dialogue with the board, represending their beneficiaries and looking after their interests.
What are the 5 things for an effective manager ?
PARAD - -Power -Authority -Responsibility -Accountability -Delegation
What happens when demand is perfectly INelastic?
PED = 0 The demand curve is a verticle straight line No change in quantity of demand, regardless of a price change.
What happens if demand is perfectly elastic?
PED= infinate Consumers will want to buy an infinite amount but only up to a certain price.
What does Non-repudiation mean?
Part of ACIANA for qualities of a good system, refers to info not being rejeced by its recipients from faults in the system.
What is the operating core of Minztbergs building blocks?
People directly involved in the process of obtaining input, and converting them into outputs, i.e Direct Operational Staff.
What do new issue of shares take form of?
Placings Offers for sale Direct offers.
What are the 4 things in the management process ?
Planning Organising Controlling Leading
What are the 4 types of information ?
Planning information Operational information Tactical information Strategic information
What is the position audit?
Planning process which examines the current state of -assets & finance, -products & brands, -internal organisation, -operating systems -return to shareholders -Current results
What is the PESTEL analyasis for the environmental factors affecting a business?
Political factors Economic factors Social/demographic factors Technological factors Ecological factors Legal factors
What is the definition of a market?
Potential buyers & sellers of an item come together for the purpose of exchange
What is an equalibrium price ?
Price of goods where demand and supply are the same. It is the point where the demand curve and supply curve cross.
What is the Principles-based approach to governance structures?
Principles as set out by the OECD. Saying the framework should: - Promote transparent & efficient markets that is consistant with the rule of law - Protect & facilitate shareholders rights - Ensure the equitable treatment of all shareholders, including minority & foreign shareholders - Recognise the rights of STAKEholders - Ensure timely & accurate disclosure on material matters - Ensure the board is effective.
What is the ethics- based approach?
Principles-based. General guidelines with fundamental values & qualities.
What is Data analytics?
Process of using fields within the source data itself , rather than predertermined formats, like data science. You informing conclusions and supporting decision-making.
What is the conduct division for the FRC?
Professional oversight- oversees regulation and seeks to promote high quality work Professional discipline Corporate reporting review: - requirements and standards of the financial reporting standards. ACCOUNTS NOT AUDIT -Can seek voluntary remedial action & a court order for remedial action - Audit quality review.
What is the Simon constraints theory?
Profit is not the most important constraint in their business. This is mostly where ethical constraints apply such as staff relations and environmental protection.
What is the difference between a private sector and public sector?
Public is owned and managed by the government, private is by private shareholders
What is it called when the government has to borrow as its expenditure is more than its income?
Public-sector Net cash requirement (PSNCR)
What is a supple curve?
Quantity of suppliers x price levels. UPWARDS curve from left to right.
How do you measure productivity?
Quantity of the service in relation to resources put in, how many items per hour per employee.
What happens to a risk if you outsource it to a 3rd party, being insurance or a technological firm?
RISK TRANSFER
What is volatility of returns?
Range of potential variation of profits, dividends, share prices year to year ,leading to an increased risk to the shareholders.
What is the Simon Profit satisficing theory?
Rather than seeking to maximise profit. MANAGERS (not shareholders) may choose to achieve simply a satisfactory profit for a business.
What happens if through your risk management you found a risk to be high probability but low impact?
Reduction is the key response
What is equity for legislation on the markets?
Regulation of social justice. Such as equal access to healthcare goods & educational resources etc. EQUITY = SOCIAL JUSTICE
What is delegated legislation?
Regulations which have the full force of statute law. Made under powers given to Government Ministers under Acts of Parliament such as HSWA.
What needs to be in the qualitative characteristics of the financial statments ?
Relevence & faithful representation.
What is the remuneration section of the UK corporate govenance code?
Remuneration focuses on the work of the remuneration committee to develop policy on the remuneration of executive directors & how it should be set.
What are the two risks from short term finance?
Renewal risk Interest rate risk
What is a unitary board?
Responsible for both management of the business & reporting to shareholders, via meetings & financial statements.
What is an underwritten new share issue?
Rights issue.
What is the primary focus for shareholders?
Risk & return
What is the attitude where you pick the highest return regardless of the risk?
Risk Neutral
What is downside risk?
Risk that something will go wrong.
What is a complience based appraoch?
Rule based - anticipate every possible ethical situations - tick box approach
What are characteristics of operational goals ?
SMART -Specific -measurable -achievable -relevant -time bound
What is corporate appraisal within the strategic planning process?
SWOT analysis (Stengths, Weaknesses, Opportunities, Threats) in relation to the internal and environmental factors affecting an entity in order to establish its condition prior to preperation for the long term plan.
What is the difference between IT serivce delivery and IT service support?
Service delivery - -IT service operations, e.g report distribution - Capacity monitoring and management - Customer billing and budgeting. - Service continuity/ contingency management. Service SUPPORT- -Maintaining the appropriate configuration of IT service, i.e hardware, software, and networks. -Physical and logical integrity of the infrastructure. - security and access control - prevention, investigation and resolution of problems.
Who cares about a return on investment ?
Shareholders and bankers
What are equity holders?
Shareholders, facing higher risk but higher return.
What are Marketable securities?
Short-term highly liquid investments that are readily converted to cash.
What is Hofstede's Cultural Dimensions?
Shows how culture affects corporate governance by the following: Masculinity V Femininity Individualism V Collectivism Power Distance Long- term orientation Uncertainty Avoidance Indulgence V Restraint
What is a brand competitor (Kotler) ?
Similar firm offering similar products
What is an industry competitor?
Similar products but different in other ways such as geographical location or the range of products, i.e tesco & amazon
What is a flat business?
Small number of hierarchial levels - normally from wide spans of control.
What is a simple structure ?
Small young company doing simple task. often a sole trader business or very smal firm. It is an entrepeneural structure - Just one on top
What is speculative risk?
Something could go better than expected.
What is a plan?
State what should be done to achieve the operational objectives
what is the porter hypothesis?
Strict environmental regulation trigger the discovery and introduction of cleaner technologies & environment improvements. The innovation effect.
What is a natural monopoly? HARD TO BECAUSE OF FIXED COSTS
Such high levels of fixed costs, there is no fear of entry in the market for others.
What is Strategic information ?
Supports LONG TERM decision making - can resources be available to expand production?
What is corporate governance?
System which comapnies are directed & controlled. Directors are responsible for the governance. Shareholders are responsible for appointing the right directors & auditors to satisfy the appropriate governance. It is a set of relationships between companies management, its board, its shareholders & other stakeholders.
What is the Matrix structure most suitable to?
THINK MATRIX THE FILM - Hi-tech industries Educational establishments Research & Development.
What are money markets?
Term that covers a vast arrey of markets buying and selling different forms of money market securities. They allow financial institutions to deal with short term fluctuations in their own assets & liabilties.
What is a digital asset?
Text or media file that is formatted into a binery source & that includes the RIGHT to have it. if you have no right than its not a digital asset. You must maintain security of your digital asset by encoding, encryption, watermarks.
who is responsible for risk management & internal control systems?
The ENTIRE board
What is Cyber-resilience?
The ability of an organisation to ensure that its data and information is reliable, available, had integrity and is adequately protected from unauthorised access.
What is the definition of sustainability?
The ability to 'meet the needs of the present without compromising the ability of future generations to meet their own needs' (the Bruntland report)
What is the definition of power ?
The ability to get things done.
What is procurement?
The acquisition of goods and services at the best possible total cost of ownership. To do this you need to obtain the right 'procurement mix' which is; -Quantity -Quality - Price -Lead time - Place
What is the definition of corporate responsibility?
The actions; activities and obligations of business in achieving sustainability. Thank
What is the definition of efficiency?
The amount of resources used for tasks that have been achieved.
How is remuneration for NEDS determined?
The articles or the board. It should NOT includ share options or performance-related elements.
What is a bailor/bailee relationship?
The bank accepts the customers property for storage and undertakes to take reasonable care to safeguard it against loss or damage.
What does the bank of england do on its Financial stability?
The bank of england Financial Policy (FPC) ensures stability by removing systematic risks in the UK financial system.
What is stage 'D' of the business cycle ?
The boom stage. Capacity and labour become fully utilised, causing bottlenecks in some industries as theres a shortage of skilled labour. Further rises in demand is met by PRICE , rather than production increasing. Majority of business's are profitable. Expectations of the future are very optimistic and the level of investment is high.
What is a mission?
The business's basic function in society
What is the definition of culture ?
The common assumptions, values and believes that people share them way we do things round here'.
What is product orientation ?
The company falls in love with its products; as is often seen with hi-tech industries, and it can no longer see that the sophisticated and costly specification is way beyond the needs of customers.
What is the production orientation ?
The company is preoccupied with its making as many unit as possible. CUSTOMER NEEDS ARE SUBORDINATED to the desire to increase output.
how is competition regulated in the uk?
The competition act 1998, prohibits agreements, business practices and conduct that damage competition. COMPETITION IS GOOD = ALLOCATES COSTS PROPERLY. Penalties can be 10% of their revenue.
What are the two divisions of FRC?
The conduct division The codes and standards division
What is Human resources management?
The creation, developent and maintenance of an effective workforce, matching the requirements of the business and responding to the evironment.
What is the definition of Motivation ?
The degree to which a person wants certain behaviours and chooses to engage in them.
If members do not like the decision by the investigation committee, who can they esculate it to?
The disciplinery committee.
What is market segmentation ?
The division of the market into homogeneous groups of potential customers who may be treated similarly for marketing purposes.
What is informational technology (IT)?
The equipent used - to capture, store and present info. Large part of information systems infrastructure
What is risk appetite?
The extent to which a business is prepared to take on risks in order to achieve its obejctibes.
What is a competitive strategy?
The generic strategies for competitive advantage a business will pursue.
What does it mean if cross elasticity is negative?
The goods are compliements.
What does it mean if cross elasticity is postivie ?
The goods are substitutes
What is the definition of uncertainty?
The inability to predict the outcome from a lack of information.
What are goals ?
The intentions behind decisions and actions, or a desired end result
What is sales orientation?
The main purpose is to sell more of the product or services which they already have available. There is NO systematic ATTEMPT TO IDENTIFY CUSTOMER NEEDS, nor to create products or services which will satisfy them.
What is a supply chain?
The network of organsiations, their systems , resources and activities that are required to turn raw resources into a product or service provided to a consumer.
What is the 'Span of control'?
The number of subordinates reporting to one person.
What is the definition of responsibility ?
The obligation a person has to fulfil a task which he has been given.
What is the definition of Information?
The output of whatever system is used to process data
What is a griffin good?
The possible variation in an outcome from what is EXPECTED to happen. You can estimate it
What is coercive power?
The power of physical force or punishment
What is negative power?
The power to disrupt operations. For example refusal to communicate information etc.
what rules relate to the issue of new securities/issues?
The propectus rules.
What is demand?
The quantity of a good that potential purchases would buy, or attempt to buy, if the price of the good were at a certain level
What is the definition of authority ?
The right to do something or to ask someone else to do it and expect it to be done. It is another work for legitimate power.
What is the decisional manager role ? (Mintzberg)
The role the managers actually do such as: - allocate resources - handle disturbances -negotiate - solve problems - act as entrepreneur (creating & controlling change)
What is marketing mix ?
The set of controllable marketing variables that a firm blends to produce the response it wants in the target market (Kotler).
What is marketing?
The set of human activities directed at facilities ring and consummating exchanges or the management process which identifies and anticipates and supplies customer requirements efficiently and profitability.
Who is a primary stakeholder ?
The shareholders / partners
What is organisation behaviour?
The study and understanding of individual and group behaviour in an organisation setting to help improve performance and effectiveness.
What happens if other supply conditions occur with a supply curve>
The supply curve wuth shift ITSELF.
What are business ethics?
The ways in which a company behaves in a society which has certain expectations of how a decent company should behave, also known as corporate responsibility.
What is a vision?
Their vision of the future state of the industry or business what it's mission should be. For example 'being the leading provider of x by 2015'
What two models did McGregor come up with for Human behaviour?
Theory X & Theory Y
If a persons intellectual potential is only partially utilised, is this theory X or Y?
Theory Y
What are FMCGs? ( Fast- moving consumer goods)
These are high volume, low unit value, fast repurchase. For example bread and baked beans.
What are consumer markets ?
These are markets for products and services bought by individuals for their own or family use. These are categorised by fast moving consumer goods or consumer durables.
What are Consumer durables ?
These have a low volume but high unit value, such as services, such as white(fridges), brown (tv's) or soft goods.
What are ICAEW directly responsible for ?
They are a PRIMARY regulative body. Their DIRECT responsibility is: - ENTRY & EDUCATION - Eligibility to engage in public practice - Dealing with professional misconduct - Eligibility for the performance of reserved activities under statutory powers delegated by the government. - Professional conduct requirements
What happens if through your risk management you found a risk to be low probability but low impact?
They are just accepted
What if cross elasticity is 0
They are unrelated.
What does the FRC's discipliary Accountancy Scheme do?
They invesitgate for the body of members i.e ICAEW. They deal with important and serious offences which affecting the public interest & has serious public concern. It must be Transparent Independent Fair
What are external economies of scale?
This occues when industry grows in size, for example - Large skilled labour force - Specialised ancillary industries
What is Druckers Multiple Objectives theory ?
To manage a business you need a balance of a verity of things such as the following: -Market standing -Innovation -Productivity -Physical and financial resources - Profitability - Manager performance and development -worker performance and attitude - social responsibility
What is a primary objective ?
To maximise profit subject to laws and regulations.
What are secondary objectives ?
To support the primary objectives: - market position - product development - technology -employees and management
What are examples of financial instruments?
Treasury bills Deposits Certificates of deposits Gilts Bonds Commercial paper
Who deals wih foreign exchange requirments?
Treasury.
What is a Executive information system (EIS)?
Turns Internal & external info which produced high level summary data for senior management, used to support decision making, for strategic/long-term planning. Not routine information.
What is a Joint venture ?
Two companies come together to make a 3rd company which is usually a LTD company. This is formed in which the businesses take a financial steak and management is provided as agreed.
What is FRC ? Financial reporting council?
UK's independant regulator for corporate reporting and governance. - Sets standards & policies -Monitors the quality of audits & financial reporting in large entities. -Oversees self regulation in the accountancy - Acts as a discipliary body. It has two divisions.
What are the qualitative characteristics which ENHANCE the usefulness of the Financial statements?
Understandability Comparability Verifability Timeliness
What does the matrix structure contravine from Fayols management principles?
Unity of command - having only one boss.
What is a management buy out?
Venture capitalist invest in these, it is an acquisition in which a company's existing managers acquire a large part, or all, of the company, whether from a parent company or non-artificial person
What is a Dividsionalised structure ?
Very large, old, divisable structure. Starbucks for example. Divided either geographically OR product based. Each have their own profit responsibility. Graph is wider than Functional.
What are the 4 "V's" of operations?
Volume Variety - flexibility Variation- capacity/utilisation Visibility - customer satisfaction heavily influenced.
What do we need short term finance for?
Wages & payables
What is Johnson & Scholes SAF anylysis?
When evaluating & choosing strategies. - SUITABILITY - does it fit the business operational circumstances ? - ACCEPTABILITY - to stakeholders, - FEASIBILITY - can it be implemented.
What is market imperfection?
Where monopoly power is leading to inefficiency, government will intervene through controls.
How do you classify a business ?
Whether the organisations primary objective is to make profits for their owners
What is a secondary bank?
Wide range of merchant banks & do not take part in a clearing system.
If a person is threatened with punishement is that theory X or theory Y?
X
Are the FRC Accountancy schemes disciplinery procedure in public?
YES
Is only basic salary pensionable?
YES
If ICAEW write to you as a member asking questions about a complaint, must you answer?
YES. You must answer all questions and provide info asked for.
Are numerical targets more likely to be secondary objectives ?
Yes
Do the disciplinery committee publish your penalty ?
Yes
Does Automation increase liquidity risk?
Yes
Does the audit committee/board state weather it considers it appropriate to adopt an ongoing concern basis of accounting, over at least a 12 month period?
Yes
Does the board for an Audit committe have to have at least 1 member who has financial experience?
Yes
Is a share price external information?
Yes
Is the business's financial objective of shareholders wealth maximisation a primary objective ?
Yes
do the external auditors report on the complience with the UK Corporate governance code?
Yes
Can the Chair be part of the remuneration committee?
Yes, but he cannot chair it himeself
can an exuctive director be a non-exec in a different company?
Yes, but only one other company.
Is a diciplinery tribuneral from FRC mainly non-accountants?
Yes.
What were Taylors 3 CONCLUSIONS based on Human behaviour at work?
You have the following people: Main motivator - high wages Manager's Job - Tell workers what to do Workers Job - Do what they get told and be paid.
What is a scalar chain?
a chain of command from the most senior to the most junior.
what is the demand curve?
a curve that shows the relationship between the price of a product and the quantity of the product demanded. The higher the demand, the higher the price, it is a negative downward slope from left to right. The curve itself stays the same but ehrn demand or price changes, then there are movements ALONG the demand curve.
What is regulation?
any form of state interference with the operation of the free market.
What are core competencies?
are the resources and capabilities that comprise the strategic advantages of a business.
who is responsible for making recommendations, of external auditors?
audit committee
what is the strategy for a question mark product?
build or harvest
What are management controls?
business is planned, led, organised, structured properly.
What is asymmetric information?
comes into affect when consumer choice is distorted. Regulation is often the best form of government action whenever informational inadequacies are undrmining the efficient operation of markets. = CONSUMERS ARE AT RISK SO THEY BRING IN REGUALTIONS OF WHAT THEY CAN SELL TO US.
What is a Generic competitor?
compete for the same disposable income - i.e DVD store and book store on the same street
What is the doctrine of comparative advantage?
countries should stick to what they are best at. Which may suggest preserving the status quo.
What are externalities?
dealing with the problem of external costs and benefits is via some form of regulation. For example compulsory education. Co2 emissions
What is inflation?
demand is too much & theres not enough supply
who is responsible for preventing &b detecting fraud?
directors & management of the company.
What is the definition of Data?
distict pieces of information which can exist in a variety of forms.
What is an Upstream supply chain members?
elements of the suply chain that provide materials and production of goods and services.
What does the FSA code of market conduct do?
embodies the standard of behaviour to avoid market abuse. You can get an unlimited fine. Market abuse- Insider dealing Manipulating devices distorting/misleading behaviours
What is data verification ?
ensuring data entered matches source documents.
What is distributed ledger technology?
every accounting transaction recorded by an entity is also posted to a public ledger. IT reduced the need for auditors to verify the transactions & ownership of the assets.
what is a licencing agreement?
evidence giing permission to another company to sell and manufacture the product.
What is a public sector investment?
financed by higher taxation, or by increase deficit between government income and expenditure, causing a higher public-sector net cash requirement & force up interest rate affecting the private sector etc.
what is Operational information ?
helps people carry out their day2day activities , eg how many nurses needed on shift.
what strategy relates to a dog product?
hold or divest
what is the strategy for a cash cow product?
hold or harvest
WHAT ARE NORMAL GOODS?
income rises so does demand, regardless of existence of other substitutes & complements.
Are necessities elastic or inelastic?
inelastic
What are Mintzberg's managerial roles?
interpersonal roles, informational roles, decisional roles
What is a systematic risk?
is an EVENT RISK - this can be by a supplier failing its contractual obligations
What is price/demand theory?
is concerned with how market prices for goods are arrived at through interation of demand and supply.
What are microeconomic environment?
it looks at a particular business. Which involves looking at how the market mechanism works.
What happens with a change of price with a upply curve ?
it will shift along
What is upside risk?
likely that things will go right
What is the short run?
long enough so supplies can be altered but the plant and machinery in use of production cannot be altered
What is treasury management?
managing business funds, namely cash/ other working capital items, plus long-term investment , debts and equity finance.
What is a pure manopoly?
monopoly by virtue of there being only one supplier in the market.
can a complaint against you, be from a breach of a principle?
no. a bye-law rather than a principle.
What is the price elasticity of supply ?
opposite of demand.
What is maturity transformation?
overcomes the problem of matching the time periods for which a company or individual needs funds with the time periods over which investors wish to invest.
What is recievables insurance?
payment of a premium in return for the payment of customer debt if it becomes irrecoverable
horizontal line is?
perfectly elastic
what if a supply curve is a vertical line?
perfectly inelastic
What is pure risk?
possibility that something WILL go wrong.
What is external reporting?
preparing financial statements for external users - ACCOUNTANTS
What is cost-push inflation?
price rises resulting from an increase in costs to produce goods & services. For example wage increase or raw materials increase.
What is demand-pull inflation?
prices rises resulting from a persistent excess of demand over supply - for example they increased toilet roll due to the demand and you couldnt get hold of any. The supply cannot grow anymore as there is full employment. There are two main causes, FISCAL & CREDIT
What are public goods ?
production is organised by the government. -Non-exludability - Non-diminishability Free market individual paying for the good, will have no incentive to pay for it, and will be free riders. Such as STREET LIGHTING
What do not-for profit organisations forcus on?
providing goods and services to beneficieries at minimum cost.
What is prudential control?
refers to the regulation and monitoring of banks and other financial insitutions by the Bank of England , the treasury etc.
what is marginal propensity?
relationship between changes in income & changes in consumption.
What is export-led growth?
relying on cheap labour and ensure economic growth by exporting.
Which of the following can be delegated, reponsibility, accountability, authority?
responsibility & authority - YOU CANNOT DELEGATE ACCOUNTABILITY.
What is CROSS elasticity of demand?
responsiveness of demand for one good to changes in the price of ANOTHER good. Changes in quantity % in A / Changes in quantity % of B
What is a private sector investment?
retiained profits, new issues of shares or borrowing. In recession, profits might be low.
what is the difference between risk & uncertainty?
risk is ypu are able to estimate probability based on past experiences. Uncertainty you CANNOT predict, as theres not alot of info.
What is delegated legislation?
seperate agencies established by government.
who appoints external auditors?
shareholders via recommendation from the audit committee
What is the market period?
so short that supply for product varies & are limited to existing inventory. Supply is fixed
what does the operational plan do?
specifies what is expected of each function in the business
What are the concequences of perfect competition?
suppliers are price takers not price makers, so it is very elastic & only earn normal profits. Usually a single selling price.
What happens to SUPPLY if it is shifted right?
supply has increased
What is institutional strategies?
the METHOD of growth
What is informational management?
the approach a business takes to its IS/IT Systems , including planning, environment and control
who would examine the problem with a conflict of interest with external auditors?
the audit committee
What is a mortgage/mortgagee relationship?
the bank asks the customer to secure a loan with a charge over the customers ASSETS.
What is productive efficiency?
the economy produces goods at the lowest cost factor, so the average cost of production is at its lowest point.
What is business partnering ?
the finance function (accountants)works alongside other business functions, providing advice and support to the other areas of the business to help them maximise their performance. They should perform such duties of: - Strategy formulation / implementation - Commercial decision making and negotiations - Business analysis - Being a sounding board, trusted advisor, critical friend.
who offers an unpublisided caution?
the investigation committee
What is the capital market ?
the national and international market in which a business may obtain the finance it needs for its short-term and long-term. There is no single market a business can access finance in a variety of ways.
what is unit elasticity of demand?
the percentage change in quantity of demand is EQUAL to percentage change in price. Therefore it changes perportionately PED = 1
What is legitimate power?
the power a person receives as a result of his or her position in the formal hierarchy of an organisation. For example a manager is delegated to authorise certain expenses.
What is crowdfunding?
the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.
what is economics?
the study of how people make decisions with limited resources & its what all national economies face.
What is an actual monopoly? DOMINANT
there being one supplier with a dominant market
what is the fundamental accounting principle directors are expected to report on in the fs?
whether it is a going concern or not.
Can you delegate power?
yes
Is monitoring and reporting and on going process when doing risk management >
yes
are directors reappointed every year at an AGM?
yes
are the rules of evidence less strict in a tribuneral than court?
yes