ACCA有关
Accountant in Business
Content
Chapter 1 The business organisation (1)
Chapter learning objectives (1)
1 The nature of organisations (2)
1.1 What is an organisation? (2)
1.2 Why do we need organisations? (3)
1.3 Classifying organisations by profit orientation (5)
1.4 Classifying organisation by ownership/control (7)
2 The roles and functions of the main departments in a business organisation (8)
2.1 The main functions within an organisation (8)
2.2 Co-ordination (10)
3 Strategic, tactical and operational planning levels in the organisation (11)
3.1 Different levels of planning (11)
3.2 The nature of strategic planning (11)
3.3 The strategic planning process (12)
Chapter summary (13)
Test your understanding answers (14)
Chapter 2 organisation structure (17)
Chapter learning objectives (17)
1 Organisational structure (18)
1.1 Different types of structure (18)
1.2 Further aspects of organisational structure (23)
1.3 Centralisation and decentralisation (26)
1.4 The informal organisation and its relationship with the formal organisation (27)
1.5 The impact of the informal organisation on the business (28)
Chapter summary (29)
Test your understanding answers (30)
Chapter 3 Organisational culture (32)
Chapter learning objectives (32)
1 Defining organisational culture (33)
1.1 Definition (33)
1.2 Components of culture (33)
2 The factors that shape the culture of the organisation (33)
3 Writers on culture (34)
3.1 Schein (34)
3.2 Handy (35)
3.3 Hofstede (36)
Chapter summary (38)
Test your understanding answers (39)
Chapter 1
The business organisation
Chapter learning objectives
Upon completion of this chapter you will be able to:
?define the term organisation
?explain the need for a formal organisation
?distinguish between different types of organisation
?summarise the main areas of responsibility for different functions within an organisation
?explain how different departments co-ordinate their activities
?explain the nature and process of strategic planning
?explain the purpose of each level of organizational management.
1 The nature of organisations
1.1 What is an organisation?
‘Organisations are social arrangements for the controlled performance of collective goals.’ (Buchanan and Huczynski)
The key aspects of this definition are as follows:
?collective goals
?social arrangements
?controlled performance.
As yet there is no widely accepted definition of an organisation. This is because the term can be used broadly in two ways:
?It can refer to a group or institution arranged for efficient work. To organise implies that there is an arrangement of parts or elements that produces more than
a random collection.
?Organisation can also refer to a process, i.e. structuring and arranging the activities of the enterprise or institution to achieve the stated objectives.
The very work organisation implies that there is order or structure.
There are many types of organisations, which are set up to serve a number of different purpose and to meet a variety of needs. They include:
?service companies
?factories
?retail companies
?political parties
?charities
?local councils
?the army, navy and air force
?schools.
What they all have in common in summarised in the definition given by Buchanan and Huczynski:
‘Organisations are social arrangements for the controlled performance of collective goals.’
(a)‘Collective goals’– organisations are defined primarily by their goals. A
school has the main goal of educating pupils and will be organised differently from a company where the main objective is to make profits.
(b)‘Social arrangements’– someone working on his own does not constitute an
organisation. Organisations have structure to enable people to work together towards the common goals. Larger organisations tend to have more formal structures in place but even small organisations will divide up responsibilities between the people concerned.
(c)‘Controlled performance’ –organisations have systems and procedures to ensure
that goals are achieved. These could vary from ad-hoc informal reviews to complex weekly targets and performance review.
For example, a football team can be described as an organisation because:
?It has a number of players who have come together to play a game.
?The team has an objective (to score more goals than its opponent).
?To do their job properly, the members have to maintain an internal system of control to get the team to work together. In training they work out tactics so that in play they can rely on the ball being passed to those who can score goals.
?Each member of the team is part of the organisational structure and is skilled in a different task; the goalkeeper has more experience in stopping goals being scored than those in the forward line of the team.
?In addition, there must be team spirit, so that everyone works together. Players are encouraged to do their best, both on and off the field.
1.2 Why do we need organisations?
Organisations can achieve results that cannot be produced by individuals on their own. This is because organisations enable people to:
?share skills and knowledge
?specialise and
?pool resources.
As the organisation grows it will reach a size where goals, structures and control procedures need to be formalised to ensure that objectives are achieved.
These issues are discussed in further detail below.
There are many reasons why organisations exist:
?They satisfy social needs, e.g. the companionship of people with similar tastes leads to the formation of clubs, societies and unions. People join organisations because they consider that they will be more secure, more successful, have more needs and wants satisfied and be better off.
?Organisations exist primarily because they are more efficient at fulfilling needs than individuals who attempt to cater for all their requirements in isolation and without assistance from others. The main reason for this is the ability that organisations have of being able to employ the techniques of specialization and the division of labour. In particular:
?They save time–a group can accomplish a task more quickly than lone individuals. ?They pool knowledge– members of organisations can share knowledge and skills. ?They are power centres– an individual rarely has the power to influence events on a large scale whereas most organisations can influence demand, win orders and create wealth.
Specialisation is perhaps the oldest organisational device. It occurs when organisations or individual workers concentrate on a limited type of activity. This allows them to build up a greater level of skill and knowledge than they would if they attempted to be good at everything.
The advantage of arranging work in this way lies in the fact that, by concentrating on one type or aspect of work, it is possible to become much more efficient. By concentrating its expertise into a limited range of activities, the organisation plans and arranges its output to achieve the most efficient use of its resources. A key aspect of specialisation involves the division of labour.
The specialisation of labour developed as industrialization advanced, and large organisations became more popular. It was first used in car production at Ford and
is associated with the work of Taylor, which we will be discussing later. The car production process was broken down into many separate tasks and each worker was required to specialise in only one small aspect of the total process. This benefits the manufacturer in three ways:
?Simple tasks encourage the use of highly specific equipment, e.g. power wrench es that speed up the manufacturing operation.
?Semi-skilled labour can be employed rather than highly skilled operatives.
?Workers are only responsible for one process and so are able to develop a high level of expertise and increase their output per period.
Modern industrialised economies make great use of specialisation and the division of labour, but for organisations to gain the full benefits of these techniques they also employ another organisational device known as hierarchy. We will be examining this further when we discuss the distribution of authority, responsibility and accountability within the organisation.
1.3 Classifying organisations by profit orientation
Organisations can be classified in many different ways, including the following:
Profit seeking organisations
Some organisations, such as companies and partnerships, see their main objective as maximising the wealth of their owners. Such organisations are often referred to as ‘profit-seeking’.
The objective of wealth maximisation is usually expanded into three primary objectives: ?to continue in existence (survival)
?to maintain growth and development
?to make a profit
Peter Drucker has suggested that profit-seeking organisations typically have objectives relating to the following:
?market standing
?innovation
?productivity
?physical and financial resources
?profitability
?manager performance and development
?worker performance and attitude
?public responsibility
Not-for-profit organisations
Other organisations do not see profitability as their main objective. Such not-for-profit organisations (‘NFPs or NPOs’) are unlikely to have financial objectives as primary. Instead they are seeking to satisfy particular needs of their members or the sectors of society that they have been set up to benefit.
The objectives of NFPs can vary tremendous ly:
?hospital could be said to exist to treat patients.
?Councils often state their ‘mission’ as caring for their communities.
? A charity may have as its main objective ‘to provide relief to victims of disasters and help people prevent, prepare for, and respond to emerge ncies.’
?Government organisations usually exist to implement government policy.
One specific category of NFPs is a mutual organisation. Mutual organisations are voluntary not-for-profit associations formed for the purpose of raising funds by subscriptions of members, out of which common services can be provided to those members.
Mutual organisations include
?Some building societies
?Trade unions and
?Some working-men’s clubs.
rather than objectives.
For example,
?Hospitals seek to offer the best possible care to as many patients as possible, subject to budgetary restrictions imposed upon them.
?Councils organise services such as refuse collection, while trying to achieve value for money with residents’ council tax.
?Charities may try to alleviate suffering subject to funds raised.
1.4 Classifying organisation by ownership/control
Public sector organisations
The public sector is that part of the economy that is concerned with providing basic government services and is thus controlled by government organisations.
Private sector organisations
The private sector, comprising non-government organisations, is that part of a nation’s economy that is not controlled by the government.
Co-operatives
A co-operative is an autonomous association of persons united voluntary to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratic ally controlled enterprise.
(The International Co-operative Alliance Statement on the Co-operative Identity, Manchester 1995).
Co-operatives are thus businesses with the following characteristics:
?They are owned and democratically controlled by their members –the people who buy their goods or use their services. They are not owned by investors.
?Co-operatives are organised solely to meet the needs of the member-owners, not to accumulate capital for investors.
Co-operatives are similar to mutual organisations in the sense that the organisations are also owned by the members/clients that they exist for. However, they tend to deal in primarily tangible goods and services such as agricultural commodities or utilities rather than intangible products such as financial services.
2 The roles and functions of the main departments in a business organisation
2.1 The main functions within an organisation
The main departments in a business organisation are as follows:
2.2 Co-ordination
It is vital that effective co-ordination is achieved between different departments and functions.
The main way this is achieved is through the budget-setting process, e.g. to ensure that production make enough products (subject to stock policies) to meet predicted sales figures from marketing. Both the production and marketing budgets will be based on the same set of assumptions.
Other mechanisms for co-ordination include the following:
?regular planning meetings between the managers
?effective and regular communication between departments to confirm deadlines, target activity levels etc.
?clear, well-documented reporting lines
Co-ordination is achieved in one of or more of the following ways; the relative complexity of the work affects the method chosen:
?Standardised work process– the work is specified, and everybody works in the same say.
?Standardised outputs–through such things as product or service specifications.
Whilst the results are standardised, the means are not.
?Standardised skills and knowledge–even though each job is performed independently. This is an important co-ordinating mechanism in professional activities and specifies the kind of training needed to perform the work.
?Direct supervision– exists throughout the hierarchy where individuals issue instructions and monitor performance. One person has a specific co-ordinating role.
?Mutual adjustment –co-ordination results from internal communication and through informal contact between the people performing their organizational roles. This exists in simple structures where people work closely together. It also applies to some complex tasks, e.g. in a research project if the outcome is uncertain, colleague s will adjust their activities in the light of new findings.
3 Strategic, tactical and operational planning levels in the organisation
3.1 Different levels of planning ? Strategic planning is long-term, looks at the whole organisation and defines resource
requirements.
? Tactical planning is medium-term , looks at the department/divisional level and
specifies how to use resources.
? Operational planning is very short-term, very detailed and is mainly concerned with
control.
Strategic plans will have to be translated into medium-term tactical plans, which in turn need to be converted into detailed performance targets and budgets.
3.2 The nature of strategic planning
Strategic planning is characterised by the following: ? Long-term perspective.
? Looks at the whole organisation as well as individual products and markets.
STRATEGIC PLANNING
TACTICAL PLANNING
?Sets the direction of the whole organisation and integrates its activities.
?Considers the views of all stakeholders, not just the shareholders’ perspective. ?Analyses the organisation’s resources and defines resource requirements.
?Relates the organisation to its environments.
?Looks at gaining a sustain able competitive advantage.
3.3 The strategic planning process
The rational approach to strategic planning breaks down the process into three distinct steps.
1Strategic analysis – three key areas
?External analysis of markets, competitors, the business environment, etc. to identify opportunities and threats.
?Internal analysis of the firm’s resources, competences, etc. to identify strengths and weaknesses.
?Stakeholder analysis – to understand stakeholder expectations/influence in order to clarify objectives.
2Strategic choice – again three key angles to consider
?What is the basis of our strategy? In particular how are we going to compete –high quality, low costs?
?Where do we want to compete? Which markets, countries, products?
?How do we want to get there? Organic growth, acquisition or some joint arrangement such as franchising?
3Strategic implementation
?Once determined, the long-term strategy needs to be translated into plans for marketing, human resources management, IT, production, organizational structure, etc.
?The strategy may involve major changes so these will also have to be managed.
Chapter summary
Test your understanding answers
Chapter 2
organisation structure
Chapter learning objectives
Upon completion of this chapter you will be able to:
?explain the different ways in which an organisation might be structured
?list advantages and disadvantages of each type of organizational arrangement
?define the terms scalar chain and span of control
?what factors influence the span of control
?give reasons why ownership and management of the organisation are often separated ?explain what is meant by centralise d/decentralised structure
?what are the advantages and disadvantages of the informal organisation
?identify what impact the informal organisation has on the business
?how can managers foster the benefits of the informal organization while at the same time reducing its potential disadvantages.
1 Organisational structure
1.1 Different types of structure
A typical pattern of structure change can be represented by the following sequence.
Entrepreneu rial
?This type of structure is built around the owner manager and is typical of small companies in the early stages of their development.
?The entrepreneur often has specialist knowledge of the product or service
?Example owner/managed business
Advantages
?There is only one person taking decisions – this should lead to decisions being made quickly.
?As soon as an element of the market alters, the entrepreneur should recognise it and act quickly.
? A lack of a chain of command and the small size of the organisation should mean that the entrepreneur has control over the workforce and all decisions within the organisation leading to a lack of goal congruence.
Disadvantages
?This type of structure is usually suited to small companies where due to the size;
there is no career path for the employees.
?If the organisation grows, one person will not be able to cope with the increased volume of decisions etc.
Functional structure
?This type of structure is common in organisations that have outgrown the entrepreneurial structure and now organise the business on a functional basis. ?It is most appropriate to small companies which have few products and locations and