P92 Ch 3
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Types of plans
- Strategic / corporate plans
- Operational plans
Areas covered within strategic & corporate plans
- setting objectives
- identifying what needs to be done for these objectives to be achieved
- creating the most appropriate structure
- allocating management duties and responsibilities to senior managers
- agreeing & establishing a consistent management style
- agreeing & setting budgets
- agreeing staff incentives
- setting sales targets
- planning the most efficient use of material resources
- setting timetables & deadlines
- identifying contingency plans
Points to consider in an action / business plan...
- strategy for achieving objectives
- specific activities that will be undertaken
- allocation of specific responsibilities
- start & end dates of each activity
- estimated resource requirement
- expected cost of activities
- expected results
Types of control models
- management accounting
- critical success factor
- key performance indicators
- balanced score cards
- management by objectives
What are critical success factors (CSFs)?
CSFs are areas that are critical to a company realising their mission either by exploiting opportunities or by fending off dangers posed by external threats of internal weaknesses. Once a CSF has been identified it is aligned with an action point.
Differentiate between results & effort orientated KPIs
- results >> bottom line
- effort >> level of effectiveness being achieved
Perspectives in balance scorecards...
- learning & growth
Definition of budget
...a financial or quantitative statement prepared in advance of a specific accounting period. It typically covers a short period of months (up to a year).
Advantages of budgeting
- Unification of effort
- Basis of comparison
- Financial awareness
Steps in the budgetary process
- Guidelines from the Chief Executive
- Consultation & preparation
- Review by budget committee
Methods of budgeting
- "Top down"
- "Bottom up"
- Zero based budgeting (ZBB)
- Rolling budgets
Causes of variances in budgets
- Inappropriate standard
- Inaccurate recording of actual costs and revenues
- Random events
- Operating efficiency
Steps in the decision-making process
- Understanding why a decision must be taken
- Prior consideration & discussion of the options
- Taking the most appropriate decision
5 Cs of decision making
Define knowledge management...
...the compilation and redistribution of an organisation's skills and experience for the benefit of the organisation as a whole. The two main strategies are codification and personalisation.
Points to consider when deciding how to disseminate MI
- Clarity is key
- Managers need to tailor their communication to their recipients
- Managers should ensure that info relating to impending action genuinely pre-empts any action
- Written information >> quick & easy to distribute but their is scope for interpretation and can be seen as impersonal
- Discuss issues at meetings with staff >> personal; opportunities for questions & clarification
- Planned changes that affect staff should be communicated as early as possible
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