questions Flashcards

Question

What are the three different types of boundaryless structures?

Answer 1

- Hollow organisations - virtual organisations - modular organisations

Answer 2

they split their functions into core and non-core activities and outsource the non-core activities to other organisations

Answer 3

they outsource a lot of their functions to other organisations with very few kept in house. have small central staff who co-ordinate the outsourcing and ensure customers needs are met

Answer 4

a boundarlyess manufacturing company, instead of making their own product they break the process down into modules or components. they can choose to make their own components or outsource them and then put it together themselves

Answer 5

that organisations are made up of 5 key building blocks and that each block corresponds to a specific group of people in the organisation. only one building block could dominate

Answer 6

- strategic apex = senior level management - middle line = middle management - operating core = workers creating/producing core product - technostructure = analysts that plan and control work of others - support staff = admin support and indirect services - ideology = organisations beliefs and values

Answer 7

dominated by strategic apex also known as the entrepreneurial structure in newer organisations whose workforce has direct supervision

Answer 8

dominated by technostructure occurs in large established organisations workforce formalised with rules and procedures jobs and roles clearly defined large number of plans and budgets standardisation very important

Answer 9

dominated by operating core organisations rely on highly skilled staff large number of rules and procedures staff have independence and power difficult for senior management to control organisation

Answer 10

dominated by middle line similar to divisional structure middle managers have control over everyday operations and strategy of their departments leaves directors to focus on strategic planning

Answer 11

dominated by support staff focuses on innovation for fast moving active industries creates teams of experts from different fields power allocated where needed standardisation not encouraged

Answer 12

dominated by ideology missions and beliefs behaviour is standardised employee actions tied in

Answer 13

ownership and management of large companies separated owners elect directors to run company for them safeguard and controls put into place so business is being run in owners interest direction and management separated directors may appoint managers to deal with day-to-day issues directors focus on high level strategies

Answer 14

line of authority that can be traced up or down the chain of command relates to number of levels of management in organisation

Answer 15

number of people a manager is directly responsible for

Answer 16

has many levels of management and narrow span of control (long scalar chain) tend to take longer to make decisions

Answer 17

few levels of management wide span of control (short scalar chain) weaker control fewer chances of progression

Answer 18

restructuring the provision of certain services so its centralised into one specific part of the business and run like a separate business charging departments

Answer 19

where upper levels of hierarchy retain authority for decisions

Answer 20

lower levels of people and units have authority to make decisions

Answer 21

management style ability of management/employees geographic spread size of the organisation/scale of activities

Answer 22

senior management can concentrate on strategy better local decisions due to local expertise better motivation due to training and career path smaller chain of command means quicker responses

Answer 23

senior management loss of control dysfunctional decisions due to lack of goal compliance poor decisions by inexperienced managers training costs duplication of roles extra cost in getting information

Answer 24

model used to illustrate types of strategic planning at each level of the hierarchy

Answer 25

strategic planning tactical planning operational planning

Answer 26

senior managers make long term decisions for entire organisation

Answer 27

middle management look at plans for specific divisions or departments and specify how to use resources

Answer 28

junior management/supervisors deal with short-term detailed and practical decisions (day-to-day decisions)

Answer 29

they improve existing products and develop new products they anticipate customer needs, generate new ideas, test and deal with costing

Answer 30

They acquire goods/services necessary for the business they deal with price and payment terms, quality and stock levels and delivery schedule

Answer 31

they convert raw materials into finished goods deal with quality of materials and finished goods, costs, wastage and efficiency and stock levels/production schedules

Answer 32

provide services to clients deal with quality and time sheets/scheduling

Answer 33

they identify customer needs, conduct market research, product design, pricing, promotion and distribution deal with customer needs, quality, promotional strategy, distribution channel strategy and pricing strategy

Answer 34

they process transactions and give administrative support deal with efficiency and information processing

Answer 35

they are responsible for bookkeeping, financial reporting, financial controls, budgeting and raising capital deal with accuracy and completeness of record keeping, monthly management reporting, and annual financial reporting

Answer 36

controllable variables blended together to produce desired results from a chosen market

Answer 37

Product Place Promotion (distribution) Price

Answer 38

Cost - high enough to make profit Customer - are they willing to pay Competition - is it higher then competitors Corporate objectives - could be set low to gain market share

Answer 39

cost per unit calculated then mark-up added

Answer 40

Low price set to gain market share

Answer 41

high price set to reflect high quality

Answer 42

different prices set for same product in different markets . e.g. off peak/peak

Answer 43

set to match competitors

Answer 44

high price set at launch and then dropped to increase demand once customers willing to pay have been skimmed off

Answer 45

product sold at a loss expecting customers to go on and buy more profitable products

Answer 46

Customers buy 2 products. first one to attract buyers and second one is expensive

Answer 47

Awareness interest Desire Action

Answer 48

advertising - media sales promotions - offers personal selling - door to door public relations - sponsoring events

Answer 49

when manufacturer sells directly to customer

Answer 50

mixture of retailers, distributors, wholesalers, and shipping agents involved in selling

Answer 51

analysis of brand strength, product quality, reputation etc analysis of competition market research to determine attractiveness detailed analysis of customer expectations and power

Answer 52

decisions of what products to sell segmenting potential markets then targeting attractive segments developing strategies for each marketing mix variable

Answer 53

setting budgets for advertising etc. setting targets monitoring and control

Answer 54

size growth prospects intensity of competition

Answer 55

differentiated (each segment being treated separately) undifferentiated (segments approached in same way) concentrated (only one segment targeted)

Answer 56

the beliefs, attitudes, norms and customs in an organisation

Answer 57

- set of norms of behaviour - symbols and symbolic actions - set of shared values and beliefs

Answer 58

- size of organisation - technology of organisation - diversity of organisation - age of organisation - history of organisation - ownership or organisation

Answer 59

that the first leaders of the company create its culture, future leaders are selected if they agree to follow the culture, link between culture and leadership is strong, important for leaders to understand culture lack of understanding of basic value is reason for failure when implementing change

Answer 60

- Artefacts = aspects that can been seen e.g. dress code - Espoused values = strategies and goals - Basic assumptions and values = difficult to identify because they cant be seen

Answer 61

- Power culture - role culture - Task culture - Person culture

Answer 62

often found in entrepreneurial structure, where there is one major source of power and influence and owner strives to maintain absolute control denoted by Greek god Zeus

Answer 63

often found in bureaucratic organisations where job descriptions dictate the way things are done. structure determines authority effective in stable environments denoted by Greek god Apollo

Answer 64

seen in project teams where the position is described in terms of results achieved. staff need to be flexible for deadlines and nothing can get in the way Denoted by Greek god Athena

Answer 65

found in small high involved organisations where individuals undertake all duties themselves. exists to satisfy requirements of the individual denoted by Greek god Dionysius

Answer 66

looked at national differences between IBMs employees around the world to find aspects of culture influencing business behaviour

Answer 67

- Individualism vs Collectivism - uncertainty avoidance index - Power distance index - Masculinity vs Femininity

Answer 68

extent of which people are integrated into groups some cultures are more cohesive than others high individualism shows staff expect to be assessed on own performance low individualism shows staff expect to be assessed in groups

Answer 69

deals with society's tolerance of uncertainty high UA don't like to act out of normal job description and prefer to be directed by manager low UA are prepared to take risks and dislike bureaucracy

Answer 70

where the less powerful accept and expect unequal power distribution high PD expect to answer to managers and don't have a say in decisions low PD expect to be involved in decisions and don't like direct supervision

Answer 71

where distance between roles and values of gender is large Masculine culture is motivated by offering of job title, increased status and pay feminine culture is motivated by work life balance, quality of life and relationships at work

Answer 72

- long-term orientations - Indulgence vs Restraint

Answer 73

Long-term focuses on future rewards short-term focuses on past and present

Answer 74

allows free enjoyment of basic and natural human drives related to enjoying life and having fun restrained societies cut off enjoyment

Answer 75

the network of relationships within an organisation, that evolves over time through friendship and common interests.

Answer 76

better motivation better communication provision of social control

Answer 77

ineffective in meeting objectives inaccurate info or rumours spread unwillingness to perform well

Answer 78

consists of numbers, letters, symbols, raw facts, events and transactions that have been recorded but not processed

Answer 79

its capable of being measured numerically

Answer 80

not capable of being measured numerically but has distinguishing characteristics

Answer 81

can only take specific fixed values

Answer 82

takes any numerical value

Answer 83

collected by researched for a particular enquiry

Answer 84

Collected by someone other than the user

Answer 85

it is data that has a meaning to the person receiving it

Answer 86

Accurate Complete Cost Understandable Relevant Adaptable Timely Easy to use

Answer 87

internal and external information long-term strategies internal information both quantitative and qualitative in summarised form on ad-hoc basis

Answer 88

information and instructions from strategic level routine and quantitative info from operational level summarised but detailed enough to allow tactical planning for short-term planning

Answer 89

info from tactical level concerned about day-to-day tasks receives info from internal sources info is detailed and precise

Answer 90

records all daily transactions summarises them for routine reports mainly used by Operational management

Answer 91

converts data from TPS into info for tactical management helps monitor performance, maintain co-ordination and provide background info on organisations and operations used for historic and current analysis as well as future predictions

Answer 92

computer system that helps deal with semi or unstructured decisions where there is a high amount of factors that may affect decision draws both internal info from TPS and external info tailor made to the requirements of the organisation

Answer 93

has flexible access to info from entire business and external environment allows senior management turn data into useful reports easily distributed to key staff many types of data on same screen easy to understand

Answer 94

hold specialist knowledge allows non experts to search system for information not part of normal information hierarchy used by employees at all levels widely used

Answer 95

- easy to use - minimum training needed - most data managers familiar with them

Answer 96

- data needs to be copied over and over again to maintain separate files - unable to identify errors - lack of detailed sorting and querying abilities - sharing violations between users - restricted to finite number of records - takes up a lot of hard drive space

Answer 97

- ease of reporting and sharing data - doesn't require much duplication - changes made doesn't corrupt programming - better security

Answer 98

- requires training - expensive to purchase and install - unnecessary for small businesses

Answer 99

- speed - accuracy - volume - complexity - cost

Answer 100

an individual or group who has interest in what the organisation does, or who is or can be affected by the organisation

Answer 101

- Internal - External - Connected

Answer 102

stakeholders inside the organisation can have a strong influence on how things are run

Answer 103

Don't have a direct link with the organisation but can influence or be influenced by its activities

Answer 104

Anyone who either invests or has dealings with the organisation

Answer 105

have a contractual relationship

Answer 106

internal and connected stakeholders

Answer 107

someone who has an interest in the organisation but no contractual relationship

Answer 108

External stakeholder

Answer 109

employees and managers customers and shareholders General public and shareholder managers and shareholders

Answer 110

Mandelows power-interest matrix

Answer 111

placing stakeholders in each quadrant depending on power and interest remember stakeholders can move position in quadrants depending on specific events

Answer 112

during formulation and evaluating new strategies

Answer 113

hierarchy influence control of the environment (knowledge)

Answer 114

Minimal effort informed satisfied key player

Answer 115

- low power - low interest don't care about the organisation nor does the organisation care about them

Answer 116

- little influence - low power - high level of interest - don't have significant power but can influence groups that do have power

Answer 117

- high power - little interest - keep them quiet by keeping them happy so don't have an active interest in company

Answer 118

- high level of power - high level of interest - active interest - fully involved in decisions to keep them happy

Answer 119

a set of institutions, political organisations and interest groups, and the relationships between them and rules and norms that govern their functions

Answer 120

- Global - world trade organisation - National - national government policy - Local - local government departments/councils

Answer 121

- supra-national - National - Regional

Answer 122

- UN resolutions - international court of justice - European parliament - European courts

Answer 123

- national governments through acts of parliament - senior courts (supreme court) - other major courts

Answer 124

- regional/federal government - local council through use of bye-laws

Answer 125

- government policy - direct legislation

Answer 126

- Housing - Crime - Education - Defence - Healthcare - Energy - Farming - Town planning - Domestic - Foreign

Answer 127

- must comply with legislations or will result in fines, bans or loss of customers - most industries have specific legislation to comply with

Answer 128

employee protection data protection health and safety consumer protection

Answer 129

physical risk - impact on physical environment which system exists human risk - access gained by unauthorised users

Answer 130

Sales goods act 1979

Answer 131

- seller must have legal title or ownership of the item being sold - goods must be of satisfactory quality - goods must correspond to description

Answer 132

supply of goods and services act 1982

Answer 133

- to be carried out with responsible skill and care - completed within a reasonable time - completed at reasonable price

Answer 134

- agreement - parties to agree - consideration - value from the contract -intention to create legal relations - relation to be legally binding - capacity and legality - must be capable to enter contract

Answer 135

the study of economic behaviour of individual consumers, forms and industries

Answer 136

considers aggregate behaviour, and study of the sum of individual economic decisions (working of the economy as a whole)

Answer 137

it focuses on how individual parts of the economy makes decisions on how to allocate scarce resources. individuals parts of the economy such as consumers, firms and industries And attempts to examine how supply and demand decisions made effect the selling price of goods within an industry or market

Answer 138

it shows how much goods someone intends to buy at different prices

Answer 139

- needs to be effective (customer needs to have cash rather than just desire) - when considering demand at given price assume other variables are constant - demand is lower on high price and higher on low price products

Answer 140

When demand changes due to change in price falling then demand rises

Answer 141

When demand changes due to change in price rising then demand falls

Answer 142

- the substitution effect (when customers substitute products with cheaper ones) - the income effect (when customers try to save income so they buy cheaper option)

Answer 143

- shows total amount of effective demand from all consumers in the market - usually shortened to DEMAND - for most goods slopes downwards from left to right

Answer 144

- Where other factors are constant in individual and market demand - change In one or more conditions of demand will create a shift in the demand curve - if the shift is outward to the right it is an increase in demand if the shift is inward to the left it is a decrease in demand - important to distinguish increase/decrease that result from shift in demand curve as a whole that result from price changes leading to movements along demand curve itself

Answer 145

- income (if income is higher there's more flexibility to buy finer things) - tastes (change frequently and can be manipulated by advertising) - the price of goods (can be unrelated, or complement or substitute) - population ( increase in population leads to bigger market)

Answer 146

either expansion or contraction in demand

Answer 147

either increase or decrease in demand

Answer 148

the relationship between two variables and measures the responsiveness of one dependent variable to the change in another independent variable - it explains the relationship between changes in quantity demanded and changes in price

Answer 149

- percentage or proportional changes used instead of absolute ones. -if the percentage is negative the minus sign is ignored

Answer 150

* If total **revenue increases** following a **price cut,** then demand is **price elastic** * if total **revenue increases** following a **price rise**, then demand is **price inelastic** * if **total revenue** falls after **price cut**, then demand **is inelastic** * if **total revenue** falls after a **price rise,** then demand **is elastic** * if **total revenue** is **unchanged** then demand is **unitary elastic**

Answer 151

1. Proportion of income spent on goods - goods take up small portion of consumers income spent, then small price change wont have much impact 2. Substitutes - if a substitute is available then small change in price will have great affect on quantity demanded 3. Necessities - demand for everyday goods tends to be stable and inelastic whereas luxury goods are fairly elastic in demand 4. Habit - goods being purchased automatically consumers not aware of price so demand is elastic 5. Time - consumers not aware of alternatives so continue buying goods even if price rises, inelasticity reduced as consumers gain knowledge of other markets 6. Definition of market - if market is defined widely then less likely to have alternatives so demand is inelastic. if market is narrowly specified with more brands available then more elastic

Answer 152

* shows how many units, producers would be willing to offer at different prices, over given period of time * based on the desire to make profit * demonstrates what a firm will provide to the market at certain prices * if price of goods increases, each unit will make more profit therefore would want to supply more to the market * therefore supply curve tends to move upwards

Answer 153

* if theres a change in factors other than price then supply curve will move * **upward shift** in supply means cost of supply has increased * so less is supplied for same price * results from: * Higher production costs * indirect taxes * downward shift of supply means increase in supply * lower profits or reduced cost of production * lower unit costs arise from: * technological innovations * efficient use of existing factors of production * lower input prices

Answer 154

where demand and supply meet

Answer 155

* intended demand and planned supply put on a graph * where the curve meets the price is set * when demand and supply correspond it is equilibrium * only one equilibirium position in the makret

Answer 156

a stimulant

Answer 157

- inelastic - unstable

Answer 158

what to produce

Answer 159

when the equilibrium price is not the desired price, governments may set prices above or below the equilibrium price

Answer 160

* governments seek to ensure minimum price for certain goods * can be done in a number of ways such as providing help to direct producers * set legal minimum price above current market price * if government set minimum price above equilibrium price (price floor) a surplus of supply is created * if applied to labour market is known was minimum wage surplus would be equivalent to unemployement * if applied to physical goods price floors cause surplus in products that have to be stored or destroyed

Answer 161

* government imposes maximum price controls * benefits consumers on low incomes * control inflation (rise) * if government sets price below equilibrium then shortage of supply

Answer 162

* macroeconomics believe costs follow the LAW OF DIMINISHING RETURNS * equal quantities of one variable input are added to a fixed factor, output increases by greater proportion, increasing returns causing average cost per unit to fall * addition to output after certain point will begin to decrease and average cost per unit will rise again *

Answer 163

SRACTC short run average total cost curve

Answer 164

* in long term costs tend to be flexible as its now possible to vary quantities of any factors that were fixed in short term * as business expands becomes less efficient to controlling costs due to poor management and pressures on supplies (diseconomies of scale) and results in average cost of production increasing

Answer 165

LRATC long-run average total cost curve

Answer 166

* large number of consumers and suppliers (that dont have power to dominate market) * products/services sold by all suppliers are identical * Perfect information (customers and suppliers have complete information of prices on goods/services sold elsewhere in the market) * no barriers on entry or exit from the market

Answer 167

that it is a perfect market

Answer 168

in a perfect market

Answer 169

* Monopolies * Monopolistic competition * Oligopolies

Answer 170

when one company controls all or most of the market for a particular product with no major competitors

Answer 171

* only one major supplier in the market * no close substitutes available * supplier free to set prices due to lack of competition * often caused by high barriers into the market or government legislation

Answer 172

occurs when a business has many competitors, but each offers a slightly different product

Answer 173

* each business makes independant decisions about product its offering and price its charging * no major barriers into market * products differentiated between business meaning one business can charge more for a product than their competitors * due to alot of competitors theres important advertising expenditure

Answer 174

where market is controlled by small number of organisations

Answer 175

* no precise number but usually dominated by 2-6 different firms * dominate position tends to: * make it difficult for new firms to enter market * give them powerful influence over price of goods they sell

Answer 176

focuses on workings of the economy as a whole including: * aggregate demand of goods * output of goods (national) * supply of factors of production * national income - total incomes earned by providers of factors of production * national expenditure - money spend on purchasing national product * government policy

Answer 177

* Economic growth = increasing productivity capacity of economy * Low inflation = ensuring prices stay stable and sustainable * High employment = getting people into work * Sustainable balance of payments = managing trade with other counties

Answer 178

* Aggregate demand * Consumer confidence * Capital * Government policy * Exchange rate movements * Use of resources

Answer 179

* Total demand for countries output * AD = C + I +G + X - M * Aggregate demand = consumer spending + investment by firms + government spending + demand from exports - imports * higher demand means increasing output to meet demand leading to growth in economy

Answer 180

* degree of confidence consumers/businesses have about state of economy and own personal finances * higher consumer confidence leads to more spending leading to growth in aggregate demand * higher business confidence leads to more investment increasing aggregate demand * confidence reduced by factors such as; unemployment, high inflation

Answer 181

* more availability of finance allows businesses to raise funds leading to expansion leading to increased aggregate demand * lower interest rates make capital cheaper boosting investments

Answer 182

* governments can increase/decrease level of aggregate demand by adjusting fiscal policies (government spending and taxation)

Answer 183

* strengthaning currency makes countries exports more expensive but imports cheaper * tends to reduce aggregate demand

Answer 184

* new technology and efficient working practices improve business productivity and lower costs therefore increasing business output * higher level of education can improve efficiency and effectiveness of workforce

Answer 185

economies show fluctuations in economic activity over time with an underlying trend of output growth

Answer 186

* Stagnation and economic growth * Inflation * unemployment * Balance of payments

Answer 187

* Government tries to encourage economic growth: * more goods being demanded and provided * more jobs leading to people employed * people earning more therefore being able to spend more and higher standard of living

Answer 188

* gap between poor and rich due to benefits not being distributed evenly * growth may be in de-merit goods * expense of the environment through ecploitation of poor * rapid growth = rising income leading to decreased demand for imports * demand for goods higher then production capacity leads to goods becoming scarce therefore rapid increase in prices, increasing inflation however government have delicate balancing act, so country can benefit economic growth while atempting to minimise risk

Answer 189

* the rise in prices of goods/services in the economy over time * reduces purchasing power of money, meaning each unit of currency buys less

Answer 190

* as prices rise, consumers purchase less, reducing growth in economy * employees push for pay rises to match price rise * other costs for businesses rise reducing investment and production * customer confidence damaged due to uncertainty of price * people with fixed income worst off * high infation in one country makes imported goods more attractive affecting aggregate demand in the economy

Answer 191

* people who save to spend later **'transactions motive'** save less to avoid power of savings being destroyed * people who save for emergencies **'precautionary motive'** save more as they dont know how much they may need

Answer 192

* inflations rises rapidly while economic growth slows * goes against traditional views of economics (inflation caused by significant economic growth) * causes dillema for government as actions to bring down inflation lead to reduction in economic growth

Answer 193

* When people are willing to work but cant find a job

Answer 194

* government suffers loss from income tax and VAT, and increase in unemployment benefits * leads to increased tax on other workers reducing spending power * workers worry about job security * damages consumer confidence * significant reduction in income effects self image

Answer 195

* records all financial payments between individuals, businesses and governments with foreign consumers and organisations

Answer 196

* Current account (imports and exports of goods) * Capital account (net change in ownership of foriegn assets between countries) * Financial account (cash flows)

Answer 197

country's imports exceeds exports

Answer 198

country's exports exceeds imports

Answer 199

trade deficit = outflow of cash from country damages internation credit rating trade surplus = inflow of cash into the country increases wealth of country

Answer 200

* Fiscal policy - government taxation and spending plans * Monatery policy - management of money supply in the economy

Answer 201

* Income - money raised from direct and indirect taxes on individuals/businesses * Expenditure - total amount government needs to spend to provide services for the population

Answer 202

a balanced budgets where income and expenditure exactly match

Answer 203

* is higher than income * government needs to borrow money - public sector net cash requirement (PSNCR) * puts more money into the economy than it takes out

Answer 204

expansionary strategy

Answer 205

When a 'deflationary gap' exisits level of aggregate demand is not enough to lead to full employment

Answer 206

* when spending is lower than income * government is taking money out of the economy

Answer 207

contractionary strategy

Answer 208

when an 'inflationary gap' exists when aggregate demand is higher than country can supply

Answer 209

can be described as expansionary or contractionary

Answer 210

* interest rates * reserve requirements * open market operations

Answer 211

* raising interest rates = increasing cost of borrowing money * reduces amount of investment and expenditure helping reduce aggregate demand * high rates encourage people to save more

Answer 212

* banks operate a fractional reserve system ( only part of deposits are kept as cash) * increasing reserve requirement reduces amount available to lend to other people which tends to push interest rates up

Answer 213

* by buying and selling its own bonds government is able to apply some control over money supply * buying back its own bonds releases cash back into circulation when selling bonds receives money therefore taking it out of circulation

Answer 214

* Classical * Keynesian * Monetarist

Answer 215

* suggests that government does nothing * economy would naturally move to an equilibrium with full employment itself * economy sorts its self out

Answer 216

* Developed by john Maynard Keynes * governments need to manipulate level of aggregate demand - demand side economics * government intervention is needed to move economy closer to ideal equilibrium point * if economy is left on its own it would get stuck * government should borrow money to inject back into the economy when growth is needed * government should increase taxes and run budget surplus to slow economy down if growing too fast * The multiplier effect

Answer 217

* only one equilibrium point in the economy where supply equals demand in all markets * only reason economy doesnt find this equilibrium point is markets held up by imperfections * role of government is to remove imperfections * imperfections such as: * inflation * government spending & taxation * price fixing * regulation of markets * minimum wage legislation * solution to economic problems = 'supply side economics' focus on improving supply factors of production

Answer 218

* growth * unemployment * inflation * balance payments

Answer 219

* running a budget deficit (Keynesian approach) * increasing availability of production factors (Monetarists approach) * cutting interest rates (Keynesian and Monetarists approach) * other policies = government grants/incentives

Answer 220

* different types of unemployment * Cyclical unemployment (demand deficit, persistent or Keynesian unemployment) in bust peirods. * Keynesian would boost aggregate demand * Monetarists would remove market imperfections as economy would naturally move to full employment * Factional unemployment = people unemployed for short period between jobs * Monetarists solution best * Seasonal unemployment * Real wage unemployment = highly unionised industries, where union keeps wages high so number of people is reduced * monetarists see this as an imperfection

Answer 221

* Government policy depends on type of inflation * demand pull inflation = demand grows faster than ability to supply * Keynesian policy focuses on reducing aggregate demand * cost-push inflation = in countries with high imports, currency weakens, cost of import rise * improved by policy to strengthan currency * monetary inflation = increase in money supply, increase in purchasing boost too high though can cause inflation to rise * Monetarists argue should be controlled through increased interest rates * expectations effect = individuals/businesses expect prices to rise due to inflation * to protect themselves wages and prices rise leading to inflationary spiral because of expectations

Answer 222

* expenditure reducing strategies * government deliberately shrink domestic economy to reduce demand for imports * reduced through Contractionary monetary policy or budget surplus * resizing of economy, reduce export prices making it more competative * surpressing demand is likely to increase unemployment * expenditure switching strategies * government encourages customers to buy domestically produced rather than imports * through controls on imports, increase export funding, lower exchange rates to make imports more expensive (currency devaluation)

Answer 223

The composition of the population in any given area

Answer 224

* population size = growth or decline * population composition = age of population * population location * wealth * education * health

Answer 225

* social structure - closely related to social class * values - accepted behaviours and norms * attitudes - positive or negative views * tastes - personal preferences

Answer 226

Johnson and Scholes

Answer 227

* population demographics * income distribution * social mobility * lifestyle changes * consumerism * levels of education

Answer 228

Through: * population structure * housing * employment * health

Answer 229

* pollution * wastage of resources * destruction (of habitats) * Loss of plant and animal species

Answer 230

* changing climate * lack of resouces * loss of sales * legislation

Answer 231

* use fewer raw materials in products * reduce packaging on products * recycling * improve energy efficiency * careful production planning (only produce whats requires and reduce wastage)

Answer 232

* use of resources that does not compromise needs of the future

Answer 233

* Workers/local community ⇒more pleasent healthier environment * Customers ⇒prefer dealing with business that takes care of the environment * Shareholders ⇒reduced waste and increased efficiency improve business profits * Public ⇒reduced pollution lead to fewer environmental problems

Answer 234

* Organisational structures (being able to work from home) * product developments * production changes * marketing

Answer 235

* roles being replaced by it systems * production roles being replaced by automated systems * improved communications

Answer 236

reducing the number of employees without reducing workload

Answer 237

removes layers of management, emphasises on team working with people taking on different roles in different teams

Answer 238

contracting work out to specialist providers

Answer 239

* Total = third party supplies most/all IT systems to organisation * Ad-hoc = organisation needs IT support for short period of time on a temporary basis * Partial = some outsourced some kept in house * Project management = creation or implementation of specific IT systems outsourced

Answer 240

* supplier may have specialist skills and knowledge * may operate fixed fee contract so amount is known * improves business flexability * supplier may be more efficient in running IT function

Answer 241

* difficult to bring IT back to organisation * organisation may be locked in contract * supplier is able to access organisations information that maybe confidential * relying on third party leaves organisation unable to create own unique system so cant obtain competitive advantage

Answer 242

1. Competitive advantage 2. Porter's 5 forces 3. Porter's value chain 4. SWOT (strengths, weaknesses, oppertunities, threats)

Answer 243

Firms external analysis assessing the degree and sources of competition within the industry. Key issues is whether the firm has sustainable competitive advantage

Answer 244

1. main competitive forces in the industry 2. different ways a firm can gain competitive advantage 3. how different activities and departments contribute to its competitiveness

Answer 245

Looks in detail at a firms competitive environment by analysing five key areas which together determine the overall profit potential of the industry. Firms ability to earn high profit margins determines whether or not it can manage the 5 fources more effectively than competitors

Answer 246

1. Competitive rivalry 2. Threat of entry 3. Threat of substitute products 4. Bargaining power of customers 5. Bargaining power of suppliers

Answer 247

* Number of relative strength of competitors (less intense by industries dominated by few large companies) * rate of growth (low key in expanding market) * high fixed costs (cut prices to drive competitors out) * competition is keen if buyer can easily switch between suppliers * if exit barrier is high company will hang on till forced out , therefore increasing competition and depressing profit * company is highly competitive if presence in the market it due to strategic need

Answer 248

* Economies of scale (hard to start on comparable cost basis) * product differentiation ( cost of overcoming good brand image and loyalty is high) * capital requirements (heavy initial investment) * switching cost (one off costs to switch between suppliers) * access to distribution channels may be restricted (difficult to gain shelf space) * cost advantages independent of scales (special knowledge favourable to suppliers)

Answer 249

* threats across the industry or within * Perter explains - 'substitutes limit the potential returns...by placing acceiling on the price which firms in the industry can profitably change' * the better the price performance alternative offered the more easily customers will switch

Answer 250

* powerful customers can force price cuts and quality improvements * bargaining power is high when combination of factors arise * factors can include: * where buyer pruchases high proportion of supplier business or total trade in market * buyer makes low profit * where quality of purchase not important or delivery timing irrelevant prices forced down * products strongly seperated with good brand image, retailer has to stock complete range to meed demand

Answer 251

* power or supplier to charge higher prices influenced by: * degree to which switching costs apply and substitutes are available * prensence of one or two dominant controlling suppliers * extent to which prouducts uniqueness, technical performance or design not available elsewhere

Answer 252

* Cost leadership * Differentiation * Focus

Answer 253

involves business making products of similar quality to rivals at lower cost normally achieved through internal efficiencies this allows the organisation to sell products at lower price than rivals (increasing sales) or sell products at same price as rivals (increasing profit)

Answer 254

* involves persuading customers product is better than rivals * can be done by adding additional features * altering customers perseption through advertising * allows business to charge premium price

Answer 255

* involves aiming at part of the market not market as a whole * particular group of customers identified with same needs and product tailored to their needs * allows business to charge premium prices

Answer 256

businesses need to choose one strategy or they would be stuck in the middle making it difficult for them to compete successfully

Answer 257

* was developed to determine whether and how a firms activities contribute to its competitive advantage * involves breaking firm down into 5 'primary' and 4 'secondary' activities and then seeing if each gives a cost advantage or quality advantage

Answer 258

1. inbound logistics ⇒receiving, storing and hanfling raw materials 2. operations ⇒transformation of raw materials to finished goods 3. outbound logistics ⇒storing, distributing and delivering finsihed goods to customers 4. marketing and sales ⇒market research & 4Ps (product, price, place, promotion) 5. service ⇒ all activities that occur after point of sale

Answer 259

1. Firm infustructure ⇒ how the firm is organised 2. technology development ⇒how the firm uses technology 3. human resources development ⇒how people contribute to competitive advantage 4. procurement ⇒purchasing but not just limited to materials

Answer 260

* set of connections between organisations and individuals interacting together to benefit entire group * allows members to share information aswell as buy and sell products

Answer 261

* examines - strengths, weaknesses, opportunities and threats of an organisation * used to view internal and external situation an organisation is in * strengths and weaknesses examine what company does good or bad * opportunities and threats look at positive/negative factors that may impact organisation externally * draws on PEST analysis * vital for long term strategic planning

Answer 262

* decision is right or wrong depending on consequence of decision * if outcome is right then action itself is irrelevant * EGOISM = action considered morally right if if outcome is favourable to person making the decision * UTILITARIANISM = action considered morally correct if outcome is favourable to greater number of people 'greater good'

Answer 263

* trys to cater to needs of stakeholders without seriously compromising interests of any one group

Answer 264

* no universal moral code to judge actions * something classed as ethical or not depends on circumstances * accepts that different people and cultures will have different views on whats right and wrong * more responsive to local attitudes * often argued that its an excuse for organisations to do whatever they want

Answer 265

* certain actions are inherently right or wrong regardless of context or circumstances * provides a framework of rules that are easy for everyone to follow * unclear where to find these ethical rules (should it be religious or universally accepted) * may lead to one rule conflicting another * linked to idea of deontological ethics (obligation based ethics) * linked to IMMANUEL KANT's work who suggests that looking at action being considered and deciding if its inherently right or wrong, ignores consequense and focuses on moral duties of individual

Answer 266

* good ethics should be seen as driver of profitability rather than burden on business * ethical framework is part of good corporate governance and suggests well run business * investors reasured about company's approach to risk management * employees motivated in the knowledge that they operate in environment of good ethical corporate behaviour

Answer 267

* cosumer and employee expectations have evolved over years * consumer may choose to purchase ethical items, even if they aren't the cheapest * employees wont blindly accept orders to act in a way they believe to be unethical

Answer 268

* mastering of specialised skills during a period of training * governance by a professional organisation * compliance with an ethical code * process of certification before being allowed to practice * have a code of conduct that members are required to follow to ensure repuation is not damaged

Answer 269

* lays down ethical standards to be applied by practising accountants around the world * recognises that some countries have specific requirements different from its own, therefore stricter rules should be complied with unless prohibited by local laws or regulations * IFACs code no administered by IESBA * based on conceptual approach to problem resolution * Accountants required to identify and address threats to comply with fundemental principles * takes an interest in ensuring accountants act in the interest of public

Answer 270

* integrity * objectivity * professional competence and due care * confidentiality * professional behaviour

Answer 271

* contained in the annual rulebook issued by the association * students, affiliates and members required to comply * similar framework to IFAC listing identical st of fundemental principles that must be followed

Answer 272

* integrity * Objectivity * professional competence and due care * confidentiality * prefessional behaviour

Answer 273

* Integrity = implies fair dealings and truthfullness * Objectivity = professional judgement should not be compromised because of bias or conflict of interest * Professional competence and due care = must have nesessary knowledge and skill required and must follow professional standards * Confidentiality = should not be disclosed to third party unless authority is given * Professional behaviour = must comply with relevant laws and regulations and avoid behaviour that would bring profession to disrepute

Answer 274

* most companies approach corporate code of ethics by creating set of internal policies for employees * policies can be broad generalisations (corporate ethics statement) or specific rules (corporate ethics code) * no standard list of conduct but may contain guidelines * some organisations appoint ethics officers (compliance officers) * can be seen as company escaping legal liability when employee is caught doing something wrong * also argued that its used as a marketing tool showing public how good they are

Answer 275

1. self-interest threat - other interest influences judgement 2. self review threat - required to re-evaluate own previous judgement 3. advocacy - promoting a position or opinion where impartiality is compromised 4. familiarity threat - sympathetic to others interest or close relationship 5. intimidation threat - through actual or perceived threaths

Answer 276

1. ethics training for all professional accountants 2. creation of corporate governance requirements 3. professional or regulatory monitoring and disciplinary procedures 4. setting of professional standards

Answer 277

* having effective internal complaints procedures * creating a culture helping employees follow professional codes * and applying six values - HOTTER * honesty * openess * transparacy * trust * employment - making own decisions * respect

Answer 278

1. speak to who ever is responsible for control or ethics within the organisation 2. if problem remains then, should seek legal advice or advice from professional body e.g. ACCA 3. if still not resolved, then consider reporting to relevant authorities and withdraw from engagement

Answer 279

Where the people who own the company (shareholders) are not the people who run the company (board of directors)

Answer 280

where directors run the business in their own interest rather than that of shareholders or stakeholders

Answer 281

Set of processes and policies by which the company is directed, administered and controlled, which includes the appropriate role of the board of directors and auditors of the company

Answer 282

* the membership of the board of directors * how directors pay is decided and disclosed * role of internal and external audit * how the public as rightful stakeholders in large companies have the right to know how its being governed

Answer 283

those that are involved in the day to day running of the company

Answer 284

not employees of the company and have no managerial responsibilities but do attend board meetings and have a say in strategic decision making

Answer 285

* **Strategy** -effective challenge and contribution to development of strategy * **Performance** - check performance of management is meeting objectives and monitor senior management * **Risk** - financial information is accurate and risk management is strong and defensible * **People** - determining appropriate levels of pay for executives and incharge of appointing and removing senior management * **Independence** - should be independent to carry out role effectively and responsibily

Answer 286

* half the board should be independent NEDs except chairman who usually is a NED * smaller companies should have at least 2 independent NEDs * One independent NED should be appointed to 'senior independent direct' who shareholders can contact outside of normal executive channels of communication * Chairman should be different to the Cheif Executive Officer (CEO) * executive directors and NEDs have to stand for relection by shareholders every 3 years * NED who have been with company for 9 years must stand for re-election annually

Answer 287

* made up of NEDs responsible for deciding pay and incentives of executive directors * no director should be involved in setting their own pay * remuneration committee should have atleast 3 independent NEDs (2 for smaller companies) * also responsibile for setting executive director's pension rights and compensation payments * the whole board of directos should be responsible for deciding level of remuneration for NEDs though can be delegated to committee of the board

Answer 288

1. avoids agency problem of directors deciding their own pay 2. leaves board free to make strategic decisions about company's future

Answer 289

1. danger of NEds recommending high remunerations for executive directors on the understanding that executive directors will do the same back 2. cost involved in preparing for and holding committee meetings

Answer 290

* consists of independent NEDs responsible for monitoring and reviewing company's internal financial controls and financial statements * act as an interface between board of directors and both internal and external auditors

Answer 291

* reviewing accounting policies and financial statements as a whole to ensure they are appropriate and balanced * review systems of internal control and risk management (risk management may be dealt with by risk committee) * agreement of work agenda for internal audit department and reviewing results of internal audit work * making recommendations to the board to put forward to shareholders about appointment/removal of external auditors and their remuneration and terms of engagement

Answer 292

allows auditors to report their findings to independent directors to avoid: reporting errors to executive directors as they may have been the ones responsible for them and internal auditors may not feel comfortable reporting weaknesses to executive directors

Answer 293

* formed to ensure that composition of the board is balanced * monitors process of appointment of directors to the board of directors * when recomending it needs to: * consider size of the board * various skills needed to be on the board * mix of executive and non executive directors * need for continuity on the board * attract diverse backgrounds to improve organisations strategy

Answer 294

* Business success - improved controls and decisions help corporate success * investor confidence - investors more likely to trust company thats being run well * minimisation of wastage - helps minimise waste in the company * listing requirements - following corporate governance guidelines is required by may stock exchanges to obtain a listing

Answer 295

* idea that company should be sensitive to needs and wants of stakeholders not just shareholders * organisations duty to maximise positive impacts on stakeholders while minimising negative effects * closely linked to SUSTAINABLE DEVELOPMENT * organisation needs to understand who the stakeholders are and what they expect

Answer 296

1. employee rights 2. environmental protection 3. supplier reactions 4. community involvement

Answer 297

* increased cost of sourcing materials from ethical sources * turning away business from unethical customers * management time consumed by CSR planning and implementation

Answer 298

* attracts customers by enhancing organisations repuatation * helps attract and retain good employees * avoiding pollution saves money in the long run * being environmentally friendly can save money e.g. lower bills

Answer 299

* a group of people appointed to administer, discuss or make reports concerning a subject * tend to be permanent or long term * have authority * follow well established procedures * provide a way of making difficult decisions by involving key individuals and departments

Answer 300

* they **brainstorm** new ideas * allow number of people with different skills and knowledge to work together in a **co-ordinated** manner * act as a **delaying mechanism** * help **make or implament decisions** * **oversee a function or procedure** * **gather information** about particular issues

Answer 301

* **Executive committee** = have administrative poers, meet frequently to manage affairs e.g. board of directors * **Standing committee** = formed for a particular purpose permanently * **Ad-hoc committee** = formed to complete a particular task temporarily * **Sub committee** = subordinate committee made up of members put together by a parent committee. look into particular issued or help parent committee with workload

Answer 302

* brings together individuals with necessary skills and knowledge to successfully complete a task * slows decision making process down so poorly considered decisions less likely to be made * decisions more likely to be accepted as they have been made by a committee with reps from different departments * setting up committee can delay decision making process leading to increased company time * more people involved in decision making process leading to increased motivation * collective responsibility means no individual is responsible for consequences or recommendations

Answer 303

* slow decision making can lead to increased cost and possibly miss out on valuable oppertunities * collective responsibility means no individual is responsible for poor performance so reduces motivation of committee members * members of committee may wish to further develop their own department causing conflict * work based on compromise between various members therefore fail to recommend decisive action where needed * normally only attend to the committee part time so may take committee work less serious * some 'experienced' committee members may dominate

Answer 304

* the chairperson * the secretary

Answer 305

* keeping the meeting on schedule and agenda * maintaining order * impartiality * summing up * checking and signing the minutes of the meeting

Answer 306

* undertaking all administration relating to the committee and support the chairperson in ensuring smooth running of the committee * before the meeting they: * fix date and time * book the venue * prepare and issue the agenda and other documents * during the meeting they: * assist the chairperson * make notes * advise chairperson on points of procedure * after the meeting they: * prepare minutes * act on and communicate decisions * deal with correspondance *

Answer 307

set up by the government to oversee regulation and accounts of companies e.g. companies house in the UK

Answer 308

* financial statements so interested parties can inspect them * certain key documents e.g. * register of shareholders * register of directors

Answer 309

* tax returns each year showing amounts of taxable profits earned that they own to the tax authority

Answer 310

* Financial services = FCA (financial conduct authority) and PRA (prudential regulation authority) * Charities = The charity commission * Utilities = OFGEM (office of gas and electricity markets)

Answer 311

minimum of 7 years

Answer 312

companies act 2006 (CA2006)

Answer 313

* the need to prepare financial statements * how they should be prepared (frequency and format)

Answer 314

* to be produced to be a 'true and fair' view of the position and performance of the company * they follow all appropriate accounting standards * contain information of sufficient quality to satisfy the reasonable expectation of the users * follow generally accepted practice * reasonably accurate without errors

Answer 315

under company legislation the directors are responsible for producing financial statements It is delegated to the Finance Director or the Chief Financial Officer If the FD doesnt have the skills to prepare it then an external accounting firm can assist

Answer 316

* Is the supervisory body for the IASB responsible for governance issues and ensuring member body is propery funded * develop a set of high quality, understandable, enforceable and globally accepted financial reporting standards * promote the use and application of these standards * bring about fusion of national and international financial reporting standards

Answer 317

the independent standard setting body of the IFRS Foundation responsible for development and publication of IFRSs and interpretations

Answer 318

review widespread accounting issues on a timely basis and provides authoritative guidence on these issues

Answer 319

formal advisory body to the IASB and IFRS Foundation comprised of wide range of members affected by the IASBs work They advise IASB on agenda decisions and priorities in their work, inform the IASB of views of the council with regard to major standard setting projects give other advice to the IASB or Trustees'

Answer 320

* based in london * has 14 members from 9 countries * aims to develop singh set of high quality, understandable and enforceable global accounting standards and co-operate with national accounting standard setters to achive unity around the world

Answer 321

International Accounting Standards

Answer 322

International Financial Reporting Standards

Answer 323

1. start of as a Discussion Paper (DP) 2. IASB then assigns working group to develop a new standard following input from the Staff Accounting Bulliten (SAB) and produce the first draft with points of discussion made available for public to comment on 3. Views from the DP are taken into account when drafting the Exposure Draft again available for public to comment on 4. finally IFRS issued that can be amended when necessary

Answer 324

Financial Reporting Council (FRC)

Answer 325

Accounting Standards Board (ASB)

Answer 326

Financial Reporting Standards (FRS)

Answer 327

Statements of Standard Accounting Practice (SSAPs)

Answer 328

1. Auditing Practices Board = establishes standards and guidence for auditing of companies 2. The Professional Oversight Board = independent supervision and regulation of the accounting profession in the UK 3. The Financial Reporting Review Board = examine accounts of large companies and investigate failure to comply with accounting practices 4. The Accounting and Actuarial Disciplinary Board = enforce codes of conduct and professional behaviour in the UK

Answer 329

* Debt equity strucutre * Financial measurement of commercial success * Resource allocation * Planning aquisitions and divestments (selling of subsidiary business investments or interests) * Dividend policy * Shareholder/stock market and financial press * relationships

Answer 330

* Financial accounting * Auditor relationship

Answer 331

* Debt strategy * Currency management * Working capital management * Investment appraisal * Banking forecasting * Interal financial structure * Risk management

Answer 332

* Tax strategy * Tax mitigation * Compliance

Answer 333

* Management information and accounting * Budgeting and forecasting * Internal financial structure and control * Investment appraisal

Answer 334

1. Financial accounting function 2. Management accounting function 3. Treasury function

Answer 335

* produce annual financial statements * whenever business transaction takes place needs to be recorded in organisation's accounting records * first need to be entered into the books of prime entry * then either daily or weekly entered into ledger accounts * at end of financial year balance is calculated on ledger accounts and balances used to create financial statements

Answer 336

* Statement of profit or loss (the income statement) details income aswell as costs incurred * Statement of financial position - shows assets and liabilities also shows stake that owners have of the business (shareholders equity) * Statement of cash flow - summarises cash receipts and payments for the year helps show if company is solvant and where money is being spent

Answer 337

* assists management in fullfilling their duties to plan, direct and control the operations of the business * connected with process of measuring, analysing, interpreting and communicating information in a form management can understand * uses financial accounting records as a source of data and other sources they feel useful * no legally required format for management accounts * have several common key management reports

Answer 338

1. cost schedules 2. budgets 3. variance reports

Answer 339

* lists various expenses involved in manufacturing units of a product * list of costs incurred when making a unit of each type of product * known as standard cost card * several key decisions that this report helps make: * Pricing decisions * Break-even analysis * Key factor analysis (outsourced or not) * Investment appraisal

Answer 340

* once cost per unit identified budget can be produced * shows total planned revenues and costs for business for the coming period * based on the cost schedules * budgets are useful for several reasons (CRUMPET) * co-ordination * REsponsibility * Utilisation * Motivation * Planning * Evaluation * Telling * drawback is that its only an estimate * therefore Variance report needs to be prepared at end of each period

Answer 341

* compares budget to actual results and identifies significant differences/variances between them * management may need to know why variance has ocurred, decision can then be made as to what control measurements are appropriate

Answer 342

* Management accounting = for internal use * Financial accounting = for external use

Answer 343

* Management accounting = aid planning, controlling and decision making * Financial accounting = record financial performance in a period and financial position at end of the period

Answer 344

* Management accounting = none * Financial accounting = limited companies must produce financial accounts

Answer 345

* Management accounting = management decide on information required and presentation of it * Financial accounting = format and content must follow accounting standards and company law

Answer 346

* Management accounting = Financial and non-financial * Financial accounting = mostly financial

Answer 347

* Management accounting = historical and forward looking * Financial accounting = mainly historical

Answer 348

* corporate handling of all financial matters, generation of external and internal funds for a business * manages currencied and cash flows * complex strategies, policies and procedures of corporate finance

Answer 349

* **Working capital management** = monitor cash balance and working capital ensuring it never runs out of money * **Cash management** = prepare cash budgets and arrange overdrafts * **Financing** = monitor investments and borrowings ensuring they gain as much investment as possible or little interest as possible * **Foreign currency** = monitor exchange rates and manage affairs so minimises losses due to exchange rate * **Tax** = manage affairs to try legally avoid as much tax as possible

Answer 350

exchange rate is fixed before buying. depends on what the market thinks is going to happen to exchange rates

Answer 351

Treasury and Finance function

Answer 352

* Inventory = customers happy as goods can be immediately supplied * Trade receivables = customers happy as they like credit * Cash = creditors happy as bills paid promptly * Trade payables = preserves own cash

Answer 353

* **Inventory** = low handling costs less risk of un-used costs * **Trade receivables** = good for cash flow, less risk of unrecoverable debts * **Cash** = more invested elsewhere to earn profit * **Trade payables** = happy suppliers and may offer discounts

Answer 354

* Debt - borrowing cash from third party * Equity - selling stake in business to raise cash

Answer 355

* interest payments are allowences against tax * doesnt change ownership of organisation * cheaper to service than equity , secured against assets of company * debt takes priority over equity in liquidation

Answer 356

* no minimum level of dividend that must be paid to shareholders * as bank normally requires assets to secure for loan if company doesnt have quality assets to offer then equity is more attractive as doesnt require security

Answer 357

legal use of rules of tax regimes for own advantage, reduce amount of tax payable within the law

Answer 358

use of illegal means to reduce tax

Answer 359

conduct that reduces tax liabilities without counteracting the intentions of parliament

Answer 360

* transactions are recorded in the same way * can be adopted by everyone * staff can refer to written procedures for clarification * new staff trained more quickly * easy for auditors to follow * errors and frauds identified more easily

Answer 361

* objectives of the system * the required outputs * likely inputs

Answer 362

* requisition - staff decide what good need to be ordered and produce a purchase requsition, then authorised and passed to purchasing department * ordering - order placed, obtain quotes, order authorised * goods received - goods inspected, and recored kept * invoice received - supplier bills company, before recording in accounts, price and quantity checked * invoice recorded - recorded in accounting system * payment made - cheque produced, approved by senior manager

Answer 363

* Order received - order received, and recorded * Order processed - check if customer has valid credit account, or paid cash, check goods in inventory, order confirmation sent * Goods dispatched - goods sent to customer, goods dispatch note produced * Invoicing - invoice sent to customer * Recorded in accounts - invoice entered into accounts * Payment received - payment is received

Answer 364

sets credit limit, and chases late payments when necessary

Answer 365

* Hours worked recorded - hours recoreded and authorised by supervisor * Overtime recorded - timesheet of overtime recorded * Pay rates obtained - per hour/mont, changes authorised by senior manager * Pay calculated - hour x rate * Deductions calculated - tax etc deducted * Net pay paid to employee - paid into employee account

Answer 366

* cheques received from customers are recorded in cash book and customers account. cashier pays cheque in to company bank account * usually 2 employees open cheques and list them and supervisor checks they have all been banked * cashier goes through bank statement to check bank transfers entering the details into the cash book and passes information to sales ledger section deducting amount from customers balance

Answer 367

* companies usually pay monthly by cheque * cheque requisition prepared for each payment * cheque and cheque requsition and invoice subbmited to senior manager for approval * large amounts usually need 2 signatories * suppliers being paid by bank transfer should be authorised by senior manager first

Answer 368

* certain amount of cash kept on hand for small expenses * cheque made out to cash, to generate initial cash * staff claiming petty cash need to fill out form stating what its for and attach receipt * further cheques made out to replenish petty cash float

Answer 369

* Safeguard assets - ensure only goods received are paid for and are in good condition * Efficiency - best price is negotiated before buying * prevent fraud - preventing staff from accepting payment from supplier to get them to only buy from that supplier * prevent errors - correct amount charged by supplier, ensure all purchases are recorded

Answer 370

* safeguard assets - ensure goods only sold to customers likeley to pay * efficiency - process orders promptly so customers dont go elsewhere * prevent fraud - no theft of cash from customers * prevent errors - correct quantity of goods dispatched and invoiced

Answer 371

* safeguard assets - ensure cash wage cnt be stolen * efficiency - only pay approved overtime * prevent fraud - correct people being paid, ensure people dont claim for hours they havent worked

Answer 372

* Safeguard assets - cash kept safe from theft * efficiency - cash banked promptly so it can gain interest * prevent fruad - ensure employees dont claim expenses not incurred * prevent errors - ensure entries into cash book are correct

Answer 373

* safeguard assets - inventory kept free from damage * efficiency - inventory only produced when it can be sold qucikly * prevent fraud - ensure it cant be stolen by employees * prevent errors - cost of finished goods are calculated properly

Answer 374

* uniform processing of transactions * Lack of segregation of functions - one person can access all information * potential for data to be corrupted easily * potential for increased management supervision

Answer 375

* low capital cost * no computer experience required * easy to correct errors * ledgers are portable * can review transactions for logical sense while entering calculations

Answer 376

* slower at performing calculations * more likely to make calculation errors * analysis of information more time consuming * leass easy to audit

Answer 377

* quicker at processing information and calculations * can perform more complex calculations * fewer errors * more security * easier to sort and analyse data

Answer 378

* capital costs to set up equipment * training cost * less easy to correct errors * system can crash

Answer 379

* accounting and buying department negotiate with supplier credit terms * accounting advises buying on maximum price that should be paid to maintain margins * payments approved by buying and made by accounting * order details input by buying and passed to accounting * purchasing consults with inventory section of accounting to determine quantity already held and required * accounting consults with buying on likely costs when preparing budgets

Answer 380

* production measures quantities of materials and time used, management accountant gives monetry value. costs then allocated and absorbed to calculate production costs * cost of produxing items determined by production and accounting together * production and accounting discuss features that can be added and raw materials that should be used. discuss how to maximise quality and profit * production liases with inventory to ensure there is enough inventory before production is planned

Answer 381

* marketing and accounting discuss likely sales volume of each product in order to produce the sales budget * accounting helps marketing in detting budget and monitoring if it is cost effective * accounting has input on price thats charged * accounting can provide marketing with information on sales volumes to help maketing determine market share

Answer 382

1. Intangible = not pysical 2. Inseperable = created when customer uses it 3. Perishabile = cant be stored or used twice 4. Variable = each is unique

Answer 383

* Charge out rates - hourly rate which is charged * Estiating costs - amount of overhead cost that should be included in charge out rate * Problems measuring benefits - intangible and difficult to measure

Answer 384

process designed and affected by management, to provide reasonable assurance about achievement of the company objectives with regards to: * relaiability of financial reporting * effectiveness and efficiency of operations * compliance with applicable laws and regulations

Answer 385

* Element of Internal control ensuring that no single task is finished start to end by one single person reduces likelyhood of error or fraud

Answer 386

* ensure orderly and efficient conduct of the business * safeguarding of assets * prevention and detection of fraud and error * accuracy and completeness of account records * timely preperation of reliable financial information

Answer 387

* control environment * entity's risk assessment process * information system relevant to financial reporting * control activities * monitoring of controls * sontrol environment * risk assessment process * the information system

Answer 388

* identify and record valid transactions * describe it in enough detail * mesure the value * determine the accounting period it should be recognised in * properly present transactions and related disclosures in financial statements

Answer 389

policies and procedures help ensure management instructions are carried out

Answer 390

* Authorisation * Comparison * Computer controls * Arithmatical controls * Maintaining a trial balance and control accounts * Accounts reconciliation * Physical controls * Segregation of duties

Answer 391

process to assess the quality of internal control performance over time involves assessing the design and operation of controls and taking necessary corrective action

Answer 392

* preventive control * detective control * corrective control

Answer 393

* control that prevents errors and frauds occurring * segregation of duties * recruiting and training the right staff * control culture

Answer 394

* detect if any problems have occurred * designed to pick up errors that havent been prevented * reconciliation * supervision * internal checks

Answer 395

* address any problems that have occurred * when problems identified, ensure they are properly rectified * follow-up procedures * management actions

Answer 396

preventive as it stops the problem

Answer 397

the board is responsible for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objective. the board should maintain sound risk management and internal control system the board should review this annually and report to shareholders

Answer 398

* not legally required * advises management on whether the organisation has a sound system of internal control to protect them against loss * work is determined by management and they cover all areas of the organisation * operational and financial

Answer 399

* provide an opinion to shareholders on whether the financial statements give a true and fair view * legally required in large companies and public companies * the work is determined by the auditor but are financially focused

Answer 400

* unavoidable independance problem * employed by management but expected to give an objective opinion * need to be properly staffed and resourced * may be unwilling to disclose identification of fraud due to reprecussions

Answer 401

* disputes between management more easily settled * application to third party for finance enhanced by audited accounts * likely to include an in depth examination of business

Answer 402

* the fee * disruption in organisations work as people need to take out time to provide information

Answer 403

an unintentional mistake

Answer 404

something opposite to a particular rule of standard

Answer 405

something stated wrongly

Answer 406

1. Dishonesty - lack of inegrity or honesty 2. Opportunity - opportunity or opening for fraud 3. Motivation - individual must feel reward will outweigh cost of being caught

Answer 407

* Management domination by one person or small group of people * Unnecessarily complex corporate structure * Poor staff moral * Personnel who don't take leave/holidays * Lavish lifestyles of employees * Inadequate segregation of duties * Lack of monitoring of control systems * Unusual transactions * Payments for services disproportionate to effort

Answer 408

1. Laundering - max 14 yrs prison 2. Failure to report - max 5 yrs prison 3. Tipping off - Max 2 yrs prison

Answer 409

1. Placement - placing money in legit business 2. Layering - moving money so harder to trace 3. Integration - money now appears clean

Answer 410

1. Employee reports it to the money laundering reporting officer MLRO 2. MLRO investigates it further 3. if grounds are reasonable then MLRO reports to relevant authorities

Answer 411

Maintain sound system of internal control

Answer 412

monitor and review internal control and risk

Answer 413

fruad prevention and detection

Answer 414

an interpersonal influence directed to the achievement of a goal

Answer 415

the effective use and co-ordination of business resources in order to achieve key objectives with maximum efficiency

Answer 416

a person given responsibility for planning and controlling the work of a group of employees a connection between management and the workforce

Answer 417

1. Reward power 2. Coercive power 3. Expert power 4. Referent power 5. Legitamate power two other possible sources 6. Resource power 7. Negative power

Answer 418

* Foyal - the five functions of management * Taylor - scientific management

Answer 419

1. Planning 2. Organising 3. Commanding 4. Co-ordinating 5. Controlling

Answer 420

* one best way of performing a task * stated that pay was only motivation * four key principles: * tasks analysed in detail * staff scientifically managed * managers make key decisions * work divided between managers and staff

Answer 421

* employee behaviour depends mainly on group relations * wages are not dominating motivation factor * worker attitudes, group relations and leadership styles are key factors that determine productivity

Answer 422

1. Set objectives 2. Organise 3. Motivate and communicate 4. Establish yardsticks 5. Develop people

Answer 423

* Interpersonal * Figurehead * Leader * Liason * Informational * Monitor * Disseminator * Spokesperson * Decisional * Entrepreneur * Disturbance handler

Answer 424

1. Trait theories 2. style theories 3. contengency theories

Answer 425

leaders are born not made

Answer 426

* 1.1 = management impoverished * 1.9 =country club manager * 9.1 = task management * 5.5 = middle of the road management * 9.9 = team management

Answer 427

* Autocratic = Tells * Persuasive = Sells * Participative = Consults * Democratic = Joins

Answer 428

* There is no correct style or approach * successful leadership involves adapting to circumstances

Answer 429

* any leader has to aim to balance three inter-related goals in order to be effective * Task needs * Individual needs * Group needs *

Answer 430

* Psychologically distant managers - PDMs * Psychologically close managers - PCMs most effictive depends on circumstances of manager

Answer 431

* transactional leaders- service loyalty and compliance * transformational leaders - motivating, change cultures argued there is no right way to lead

Answer 432

* participation and involvement * education and communication * facilitation and support * manipulation and co-operation * negotiation and agreement

Answer 433

* main role of manager is to help people face reality and mobilise them to make changes * true leader doesnt have all the answers but encourages people to tackle tough challenges

Answer 434

1. Agree vacancy 2. Job analysis 3. Job description 4. Person specification 5. Attract candidate 6. Application forms 7. Interviews 8. Testing 9. References

Answer 435

1. Specialist aptitutes (ability) 2. Circumstances 3. Interests 4. Physical make-up 5. Disposition 6. Attainments 7. General intelligence

Answer 436

* direct discrimination * indirect discrimination * victimisation * positive descrimination

Answer 437

suggests that behaviour of individuals depends on other peoples expectations of them and how they are supposed to behave in given situations

Answer 438

* Role behaviour * Roll set * Roll signs

Answer 439

* Role ambiguity (doubt) * Role conflict * Role incompatability

Answer 440

* mixture of skills and abilities * synergy - pooling ideas * increased flexability * better control * increased motivation * improved communication * healthy competition within the organisation

Answer 441

* slow decision making * discussions become compromises * group pressure to conform * lack of individual responsibility * too much social interaction * increased competition and conflict

Answer 442

* Leader - pulls group together * Shaper - promotes activitym dominant * Plant - ideas person * Monitor-evaluator - criticeses others ideas * Resource-investigator - looks for alternative solutions * Implementer - turns ideas into practical solutions * Team worker - concerns with relationships in the group * Completer-finisher - progress chaser * Specialist - provides knowledge/skill for project

Answer 443

1. Forming - team initially comes together 2. Storming - conflict stage, members compete for chosen roles 3. Norming - co-operation begins and roles agreed 4. Performing - group able to operate at full potential Added later * Dorming - if performing phase lasts too long team begins to operate on auto-pilot * Adjourning Mourning - objectives complete team closes down

Answer 444

1. small team 2. limited duration 3. voluntary members 4. communication should be informal and unstructured 5. action-orietated

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