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Accounting Business Awareness > Organisational Structure and Governance > Flashcards

Organisational Structure and Governance Flashcards

1
Q

Elements of Organisation Structure

A

> Worker Speciallsation: Division of Labour

> Departmentalisation: grouping of employees E.G HR or Marketing

> Chain of Command: Helps clarify job roles, who reports to who and communication flows

> Span of Control: Number of Subordinates

> Degree of Centralsiation or Decentralsiation :

> Formalisation: is the process standardisation

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2
Q

Impact of the Hierarchy

A

> Tall ( vertical)Structure - High number of authority levels and a small number of subordinates which are tightly supervised.

> Flat (horizontal) Structure- Low number of authority levels and many subordinates more loosely supervised

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3
Q

Impact of Span of Control

A

BENEFIT:
- Mangers not overloaded with subordinates

  • Mangers can spend more time training subordinates
  • improved communication and less remoteness
  • Increased likelihood for subordinates to be promoted

Drawbacks:

  • increased cost of management
  • Tight control can demotivate subordinates.
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4
Q

Types of organisational structure

A

1) Functional Structure
2) Divisional Structure
3) Project Based structure
4) Small entrepreneurial structure

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5
Q

1) Functional Structure

A

Characteristics:

  • Centralisation of decision making
  • Clear lines of authority and vertical communication
  • Hight levels of polices and procedures
  • Standardisation of the work processes
  • Specialisation of workers and business activities
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6
Q

Divisional Structure

A
  • Is a separate business (Subsidiary) and can address the different products or markets
  • Allows quicker decision making so mangers don’t have to go through chain of command

-enables better customer focus

HOWEVER

  • Requires more resources and higher cost to support its divisions.
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7
Q

Small Entrepreneurial Structure

A

Characteristics:

  • Flat structure
  • no formal job description for staff
  • informal polices and procedures
  • innovative, creative and flexible
  • lack of organisiational control
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8
Q

Project based (matrix) structure

A

Characteristics:

  • Flat organisational structure
  • Communication and reporting across all functional boundaries
  • Flexible team culture and working practices
  • Culture of fully integrated” teams rather then islands
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9
Q

Centralised and Decentralised Control

A
  • Centralised: Concentrates decision making in the hands of senior management (Strategic level)
  • Decentralsied: Delegates decision making to the tactical level.
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10
Q

3 Levels of hierarchy

A

1) Strategic (Corporate) level
2) Tactical (managerial) level
3) Operational (Functional) Level

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11
Q

Role of Strategic Level

A
  • Concerned with overall scope and long-term direction of organisation

> Were the organisation is now
Where the organisation wants to be
How the organisation will get there

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12
Q

Role of the Tactical level

A
  • Coordination and control of operational resources

> Middle management and supervision
Concerned with coordination and control of the operational level

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13
Q

Role of the Operational level

A
  • concerned with the routine and regular nature of running the organisation on a day to day basis
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14
Q

Examples of Functions (departments)

A
  • Finance department
  • Information technology
  • Operations
    -Marketing and Sales
  • Human resource
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15
Q

Finance Function

A

-Satisfy the legal requirements of financial reporting:

> Managing Funds effectively
Management Accounting
Financial accounting
Corporate social Responsibility

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16
Q

Financial Accounting

A
  • Is useful information mainly for external stakeholders of accounts

> Statement of Profit or loss
Statement of Financial Position
Statement of Cash Flows

17
Q

Management Accounting

A
  • Is for internal stakeholders of the business such as directors and mangers

> Information includes the preparation of budgets (forecasts), monitoring business (variance analysis), costing and long-term investment decisions.

18
Q

Auditors

A

Discharge some of the legal responsibilities of senior management and can improve business efficiency and effectiveness

19
Q

IT

A
  • Installation and maintenance of computer network systems
  • Facilitates sharing of information by integrating technology and networks
  • maintains the integrity of data security
  • improves data processing efficiency
  • improves customer service
  • integrating the organisation externally with its suppliers
20
Q

Marketing and Sales Function

A
  • Product management
  • Pricing decisions

-Promotion ideas

  • Placement of products or services
21
Q

Operations Function

A

-Production

  • Performing services
  • Customer Support
  • Logistics
  • Merchandising
22
Q

Contrasting services with goods

A
  • Intangibility
  • Inseparability
  • Instant Perishability
  • Heterogeneity (variation)
  • legal ownership
23
Q

HR

A

-Recruitment of Staff

  • Preparing new staff
  • Training and Development
  • Motivating employees
  • Appraisal of staff
  • Managing Staff Discipline
  • Ensuring Compliance with the law
  • Managing personnel records, pensions and payroll
  • Internal staff communication
24
Q

Types of Risk

A

Business risk- events that potentially reduce profits cause losses or lead to business failure

  • Strategic risk- the risk of failing to achieve business objectives
  • Financial risk- risk of loss of capital invested by shareholders
  • Operational Risk- Risk of losses resulting from ineffective or failed internal process
  • Reputational risk- the risk of negative publicity that adversely impacts on the brand
  • Legal risk- GDPR risks
  • Economic risks - such as macroeconomic factors

-Political Risk- risk of war, terrorism and corruption

  • Technological Risk- risk of new emerging technologies

Societal risk- risk of changes in population and values in society

25
Q

TARA Framework

A
  • Transfer Risk- Strategies that pass on the risk to an insurance company
  • Accept Risk- tolerate risk and take no action to avoid it
  • Reduce risk- taking action to implement controls to ensure the risk is reduced
  • Avoid risk- Strategies that do not take the risk and terminate any risky activities

Accounting Business Awareness (1 decks)

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