Acca F1 Expres Notes

Chapter 1 to 3 extract from our ExPress notes for use with the current video.
A full set of F1 ExPress notes can be downloaded free of charge at www.theexpgroup.com.
Notes
ACCA Paper F1
Accountant in Business
For exams in 2010
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ExPress Notes
Chapter 1
ACCA F1 Accountant in Business
The Business Organisation and its Structure
START The Big Picture

This chapter introduces us to a variety of different types of organisations along with various corporate structures.
KEYKNOWLEDGE Typesoforganisation
The business organisation and its structure An organization is a social arrangement which aims for collective goals. It controls its performance and is separate from its environment. Benefits of an organisation include: shared expertise pooling of resources
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2010 This material is the copyright of the ExP Group. Individuals may reproduce this material if it is for their own private use. It is illegal for any individuals to reproduce this for commercial use or for companies to reproduce this material partially and/or in full by any means, be it printed, photocopied, on electronic devices or any other means of reproduction. All examples presented in these course materials are for information and educational purposes only and should not be applied to a specific real life situation without prior advice. Given the nature of information presented in these materials, and given that legislation may change at any time, The ExP Group will not be held liable for any information presented in these materials as to its application to any specific cases.
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ExPress Notes
Organisations can be classified by either their profit motive or their ownership.
Typesof Organisations PROFITmotive Commercial (profitseeking)

Commercial (profit seeking) quoted companies private companies partnerships
Notforprofit
Not-for-profit charities NGOs Clubs / societies
Typesof Organisations OWNERSHIPbasis
PublicSector
Public Sector Basic healthcare Public transport/roads Police, military Primary Education
PrivateSector
Private Sector Not controlled by the government
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ExPress Notes

KEYKNOWLEDGE Levelsofplanningwithinanorganisation
Strategic - the "big picture", long term issues and the whole company.
Tactical - medium term and focuses on use of resources.
Operational - short term "day to day" issues.
Strategic Planning comprises three main stages:
StrategicAnalysis
StrategicChoice
Strategic Implementation
KEYKNOWLEDGE Marketing
The Chartered Institute of Marketing defines marketing as The management process responsible for identifying, anticipating and satisfying customer requirements profitably. A core concept behind marketing is the marketing mix. This represents controllable variables and is commonly known as the 4Ps. Product Price Place - Promotion Organisations can adjust these variables to target various segments of the population
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KEYKNOWLEDGE Maintypesoforganisationalstructure
1. Entrepreneurial Advantages include:
Staff Staff Staff Staff Staff Staff
+ quick to react + close to workers
"The Boss"
Staff Staff
Disadvantages include: - Relies on one person - Difficult to grow above a certain size
2. Functional Often found when an organisation grows out of the entrepreneurial stage. Based around functions of a business. For example,
Directors Salesdept
Advantages include: + allows growth + enables standardization / specialisation
Production dept
Finance dept
Disadvantages include: - Can be slow - Could be conflict between departments
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ExPress Notes
3. Divisional Based around divisions of a business. Could be either Product Divisions or Geographic Divisions. Example of a divisional structure for vehicle manufacturing company:
Group Directors Car division Truck division Motorbike division
Example of a divisional structure for a company based on geographic area:
Group Directors African division

4. Matrix Structure Dual reporting by an individual to for example, the country manager and head office sales director.
Asian division
European division
KEYKNOWLEDGE Spanofcontrol/Scalarchain
Span of Control: the number of people that an individual controls. i.e. whom he is directly responsible for. Scalar Chain: the number of links in the chain of command from top to bottom of an organisation.
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ExPress Notes
When span of control and scalar chain are combined they can create either a tall or flat organisation structure.
Tall / Narrow Structure
Flat / Wide Structure
KEYKNOWLEDGE Centralisation/Decentralisation
This refers to where decisions are made. Centralised decisions are made centrally (e.g. within the head office) Decentralised decisions are made away from the centre (e.g. lower down the hierarchy) Advantages of Centralised include: Ensures goal congruence Experienced in making decisions Could attract economies of scale
Disadvantages of Centralised include: Lack of local knowledge Could be slow in making a decision Reduce motivation in decentralized staff
Advantages / disadvantages of decentralized would generally be the opposite to those found within a centralised organised.
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KEYKNOWLEDGE Formalandinformalbusinessorganisation
As well as formal structure issues mentioned above there are also informal ones which will develop over time. An example is an informal network of friends or support within a company
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ExPress Notes
Chapter 2
Organisational Culture and Stakeholders

This chapter summarises various theories on culture within an organisation and examines the concepts involving stakeholders.
KEYKNOWLEDGE Culturewithinabusiness
Culture is the way we do things around here (Charles Handy). Items which will impact on culture include: Size of organisation Age of organisation Product or service that is supplied Technology used Geographic diversity
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ExPress Notes
Writers on culture: Schein argued that the culture of an organisation is created by its first leaders. Future leaders of the organisation will follow the culture. There is a strong link between leadership and culture. Schein defined three levels of culture:
1.Artifacts 2.Espousedvalues 3.Basicassumptions
Thingseasilyseen Strategiesandgoalsofanorganisation Couldbedifficulttoidentify
Handy identified four cultural stereotypes based on Greek gods:
1.Power(Zeus) 2.Role(Apollo) 3.Task(Athena) 4.Person(Dionysus)
Onemajorsourceofpower. Oftenfoundinsmall,startupbusinesses. Emphasisonstructuredhierarchy. Canbebureaucratic. Basedaroundteamsandworkingonprojects.
Existstosatisfytheneedsofindividuals.
Hofstede looked at international perspectives on culture. He identified five characteristics:
1.Powerdistance 2.Individualism 3.Masculinity 4.Uncertainty

5.Longtermorientation
doculturesacceptinferiorpositions? dopeopleworkindividuallyortogethervia collectivism? howdifferentisthefocusongenderroles? doculturestrytoreduceuncertainty? whatistheattitudetochangeovertime?
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KEYKNOWLEDGE Stakeholdersofbusinessorganisations
There are three main types of stakeholders:
Internal Connected External
employees,management shareholders,financeproviders,
customers government,localcommunity
Conflict between stakeholders often exists. For example management could want to reduce staff salaries to reduce costs and increase their own bonuses. Mendelows Matrix plots a stakeholders power and interest and identifies how an organisation should treat them.
Stakeholder Interest Low Low Minimal effort Stakeholder Power Keep satisfied High Key players Keep informed High
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KEYKNOWLEDGE Committeesinthebusinessorganisations
A committee is a group of people with certain responsibilities. They differ from the term team in that they normally: Have a permanent role. Have clearly defined rules and procedures.
To be successful a committee should be: An appropriate size for the task (i.e. not too many or too few committee members). Have a Chairperson with appropriate skills to run a committee (e.g. to guide the meeting). Have a Secretary (i.e. to assist the Chairperson and take minutes).
A committee can be involved in: Decision making. Providing advice. Generating ideas.
An example of a type of committee is a board of directors.
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ExPress Notes
Chapter 3
Information technology and information systems in business

This chapter provides an overview of the key areas of IT and IS within the syllabus and in particular how businesses use them.
KEYKNOWLEDGE Informationsystems
Information systems are systems that turn raw data into information which management can then use for a variety of uses including improved decision making.
Rawdata
INFORMATION SYSTEM
Management information
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Information systems play a key role in most businesses. Using a well known mnemonic, information should be ACCURATE:
Accurate Complete Cost-beneficial Understandable Relevant Adaptable Timely Easy to use
In chapter 1 we identified three levels of planning within an organisation. Linking the information needs to each of these levels:
Strategic Tactical Operational
summarised,forwardlookingestimates includesgovernmentpolicy varianceanalysisandbudgetcontrols cashflowanalysis detailed internal
Information sources can be classified as:
Internal employeedetails stockinfo(e.g.stock turnover) customerinfo(e.g.aged debtors)
External Tailoredmarketresearch availablepublicinformation (e.g.companywebsites)
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ExPress Notes
Information systems used in an organisation include: 1. Transaction Processing Systems (TPS) simply records and processes transactions. E.g. generates invoices. 2. Management Information Systems (MIS) provides information to management to enable them to make better decisions. E.g. individual product profitability. 3. Decision Support Systems used to support decision making 4. Executive Information Systems used to monitor the whole business. Spreadsheets are one of the most commonly known software applications. Whilst very useful for analysing data they should generally not be used as a substitute for a database. A database can both analyse and store a large amount of information.
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Chapter 1 to 3 extract from our ExPress notes for use with the current video.

A full set of F1 ExPress notes can be downloaded free of charge at www.theexpgroup.com.

The Business Organisation and its Structure

START The Big Picture

Typesof Organisations PROFITmotive Commercial (profitseeking)

Not-for-profit charities NGOs Clubs / societies

Typesof Organisations OWNERSHIPbasis

Tactical - medium term and focuses on use of resources.

Operational - short term "day to day" issues.

Strategic Planning comprises three main stages:

1. Entrepreneurial Advantages include:

Staff Staff Staff Staff Staff Staff

+ quick to react + close to workers

Group Directors Car division Truck division Motorbike division

Example of a divisional structure for a company based on geographic area:

Group Directors African division

ACCA F1 Accountant in Business

Tall / Narrow Structure

Flat / Wide Structure

Organisational Culture and Stakeholders

START The Big Picture

1.Artifacts 2.Espousedvalues 3.Basicassumptions

Thingseasilyseen Strategiesandgoalsofanorganisation Couldbedifficulttoidentify

Handy identified four cultural stereotypes based on Greek gods:

1.Power(Zeus) 2.Role(Apollo) 3.Task(Athena) 4.Person(Dionysus)

Onemajorsourceofpower. Oftenfoundinsmall,startupbusinesses. Emphasisonstructuredhierarchy. Canbebureaucratic. Basedaroundteamsandworkingonprojects.

Hofstede looked at international perspectives on culture. He identified five characteristics:

1.Powerdistance 2.Individualism 3.Masculinity 4.Uncertainty

doculturesacceptinferiorpositions? dopeopleworkindividuallyortogethervia collectivism? howdifferentisthefocusongenderroles? doculturestrytoreduceuncertainty? whatistheattitudetochangeovertime?

There are three main types of stakeholders:

Internal Connected External

An example of a type of committee is a board of directors.

Information technology and information systems in business

START The Big Picture

Accurate Complete Cost-beneficial Understandable Relevant Adaptable Timely Easy to use

Strategic Tactical Operational

summarised,forwardlookingestimates includesgovernmentpolicy varianceanalysisandbudgetcontrols cashflowanalysis detailed internal

Information sources can be classified as:

Internal employeedetails stockinfo(e.g.stock turnover) customerinfo(e.g.aged debtors)

External Tailoredmarketresearch availablepublicinformation (e.g.companywebsites)

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