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Business Economics / Final Exam 5/2012

Contenido
T-1 MANAGEMENT ...................................................................................................................2 Levels of management and decisin making:.........................................................................2 Structure and concept: ..........................................................................................................2 Vision, mision and goals: .......................................................................................................2 Functions of management:....................................................................................................2 7 Ps of management: ...........................................................................................................3 Efficiency and effectiveness ..................................................................................................4 T-2 ORGANIZATIONAL STRUCTURE............................................................................................5 Major structural aspects .......................................................................................................5 Financial and economic structure ..........................................................................................6 Concept and elements of the organizational structure ..........................................................7

Business Economics / Final Exam 5/2012


T-1 MANAGEMENT
Levels of management and decisin making:
What is management? Organization, distribution, leadership, decision making, etc.

Structure and concept:


Some concepts: Kast and Rosenzweig: The Management System allows the company to link itself with the environment. Margulies and Raia: The Management System establishes an organizational hierarchy Bueno y Valero: Management is the set of functions, activities, responsibilities, rules and processes that determine decision making

Vision, mision and goals:


Vision: how should we be in the future?, What do we want to be in the future? Its definition is one of the central roles of the leader Should not be illusion or fantasy Recommended time horizon: 10 years Mision: What is the essence of our business and what we intend to be? Should include the reason for the company that justifies its existence Three components: the definition of the business of the company; the ideology or ethical commitment of the company, the vision (less than 10 years, 5 f.e.) Goals: Simple, desirable, realisitic, measurable, comprehensible, motivating Economics and socioeconomics

Functions of management:
Functions: Planning (what, how, with what) *1 Organizing (structure the company) Managing HHRR (leader and achieve the correct behavior to reach the goals) *2 Controlling (verify that the behavior of the company remains on the limits fixed, take corrective measures) *3 2

Business Economics / Final Exam 5/2012


*1 Planning Strategy Politics

Planning includes: Plan in the short run (tactic planification) Plan in the short run (strategic planification) Study internal and external scenario (swot) - quantify the various forecasts Study and evaluate alternatives Develop plans - Budgeting

*2 -

HHRR: Recruitment Selection Training - assignment of people to their jobs - remuneration

*3 -

Controlling: Is to measure and compare the results with goals Identify deviations if any (analyze the reason for deviation and look for solutions

7 Ps of management:
Prediction Planning Politics Programming Processes Budgeting Controlling 3

Business Economics / Final Exam 5/2012


Efficiency and effectiveness
Efficiency in general describes the extent to which time or effort is well used for the intend or tax purpose (eficiencia) Effectiveness means the capability of producing an effect (efectividad; conseguirlo)

Business Economics / Final Exam 5/2012

T-2 ORGANIZATIONAL STRUCTURE


Major structural aspects
Usually a company is identified by: Size (the volume that reaches your business in terms of money) Financial economic structure (reflects the composition through the balance equity) Ownership structure or capital (it shows who controls the company financially) Organizational structure (consists on activities such as task allocation, coordination and supervision) Structural aspects can be classified according to the following criteria: 1. According to the basic organizational structure Field of activity (products or markets) Location (plants or establishments) Technical systems (processes, technologies) Functions (divisions) Legal structure (ownership-society groups) 2. Depending on the volume or quantity issues Size Financial and economic structure 3. According to organizational characteristics Organizational structure, organizational forms and models

Business Economics / Final Exam 5/2012


Financial and economic structure
The annual accounts are: Balance sheet Profit and Loss account (P&L)

Balance Sheet

Working capital formula: Current assets Current liabilities Working capital is money available to a company for day-to-day operations WC is a financial metric which represents operating liquidity available to a business Net WC is a derivation of WC (also C. assets C. Liabilities) Could the NWC be negative? When or Why? What does this means for the company? A shop for example Has a working capital deficit A company can be endowed with assets and profitability but short of liquidity if its assets cannot readily be converted into cash Positive WC is required to ensure that a firm is able to continue its operations and that it has sufficient funds to satisfy both maturing short-term debt and uncoming operational expenses The management of WC involves managing inventories, accounts receivable and payable and cash

Business Economics / Final Exam 5/2012

Concept and elements of the organizational structure


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