Management

Activities 1-3:
Planning, Organising
& Controlling
Chapter 10, 11 & 12
Management Activity 1:

Planning
Planning: Definition
When management looks to the future
and sets goals for the business.
Planning gives a business purpose and a
focus for the future. Managers must
come up with strategies to make plans
work.
 Reduces uncertainty

Can help raise finance for the business: plans will need
to be seen when looking for finance

Why is
planning Facilitates change: plans outline changes that will
happen

important?
Improves control: without plans there will not be
control

More people working together (unity): when people

know what is expected of them, they can work together
All plans must be SMART
Plans should also follow certain steps

Each step will be outlined more

clearly in the next slides
1. Assess the situation

S - strengths
W - weaknesses
O - opportunities
T - threats
1. Assess the situation
What do the letters SWOT stand for? Explain it's use in business.
10 marks, 2007 HL

Conduct a SWOT analysis of a business of your choice (Include 2 points

under each heading).
20marks, 2010 HL

A very common exam question!

SWOT analysis of McDonald's
Strengths Opportunities

• Globally recognised brand • New restaurant locations

• Popular with children • Healthy food options
• Quick food service • More choice
• Low costs per restaurant • Helping charities to reposition the brand
• Large advertising budget

Internal External
Weaknesses Threats

• Limited menu • Competitors – KFC, Burger King

• Perception of unhealthy food • Trends in healthy eating
• High staff turnover • Public's distaste for big brands
2. Set a goal

Based on the SWOT analysis a business can plan it's goals. These can
be long term e.g. launch a new product, or short term e.g. source a
new supplier

The most important goal is the mission statement – a short, written

statement outlining the firm's goals in it's lifetime.
2. Set a goal
Mission statements:

https://www.brownthomas.com/about-brown-thomas/brown-thomas-sustainability.html
https://www.youtube.com/watch?v=Lu2VBQBpn7U&t=2s
3. Create a plan
3. Create a plan
1. Strategic plan
• Long term plans based on the mission statement
• 1-5 years
• Board of Directors and Senior Management write/implement it

2. Tactical plan
• Breaks down strategic plans into short-term plans to become
achievable
• 1-2 years
3. Create a plan
3. Operational plan
• Plans for day-to-day business running for each event/department
• 0-1 years
• Good plans: low wastage, high product turn over, max. use of labour

4. Contingency plan
• Back up/emergency plans to deal with unforeseen
events/emergencies e.g. delayed delivery
• 0-1 years
3. Create a plan
4. Manpower plan (HR)
• Ensures business has correct amount of staff, with the right skills
and qualifications
• 0-1 year

5. Financial plan
• Cash-flow forecasts predict the amount of money a business will
receive and spend in a particular timeframe
• 0-1 years
4. Implement the plan

• Management communicated the information about plans with

employees
• Management assigns tasks to staff and ensures everyone is working
towards a common goal
5. Review the plan

• Regular review meeting should take place to ensure plans are on

track
• If plans are not on track, corrective actions may be needed to
ensure the goal is reached
Stakeholders and planning
Business stakeholders can be affected by the different types of planning
Benefits of planning
Management Activity 2:

Organising
Organising definition:
Organising happens when a manager coordinates all business resources
e.g staff, money, machinery, in the most effective way to achieve
organisational goals

Organisational structures can be used to show:

• Activities done by the business
• Employee and management hierarchies
• Roles that are responsible for making decisions
Organisational structures
We will look at 4 organisational structures businesses can choose

Functional Geographic

Product Matrix
Types of organisational structures: 1. Functional
• Most common structure
• Divided into departments based on their function e.g.
marketing, finance etc.
• Each department has a manger responsible for their own
department
• Staff with the same role are in the same department
Types of organisational structures: 1. Functional
Types of organisational structures: 1. Functional
Types of organisational structures: 1. Functional
Types of organisational structures: 2. Geographic
• The business is divided into geographic areas / locations
• Each department responsible for lots of different areas e.g.
marketing, sales etc.
• Each department might produce a range of goods
• Used by transnational companies (TNCs)

After learning this structure, do activity 11.2 pg 151

Types of organisational structures: 2. Geographic
Types of organisational structures: 2. Geographic
Types of organisational structures: 2. Geographic
Types of organisational structures: 3. Product
• Divides the business based on it's product lines
• Suits a business that sells lots of products
• Each product has it's own sales, production, marketing etc. For each
product

When you've studied this organisational structure, draw a product

structure for Coca-Cola Company
Types of organisational structures: 3. Product
Types of organisational structures: 3. Product
Types of organisational structures: 3. Product
Types of organisational structures: 4. Matrix
• Combines a functional and team
approach to business
• Commonly used by tech companies
• Employees work in departments and
then come together in cross-functional
teams to complete projects
• Team members answer to the team
manager responsible for them
Types of organisational structures: 4. Matrix
Types of organisational structures: 4. Matrix
Types of organisational structures: 4. Matrix
Factors affecting the choice of organisational
structure for a business
Consumer Demand: A business may choose a product or geographic
structure so that it can satisfy consumer needs more effectively.

Specialisation: If the business wants its employees to become experts

in a particular business area it may choose a functional structure.

Intrapreneurship: The business may choose a matrix structure to

encourage intrapreneurship and develop new products and processes
for the firm.
Factors affecting the choice of organisational
structure for a business
Chain of command: Structures chosen may depend
on who is in charge and how many people are below
them. If the chain is too long, information transferred
may be incorrect or forgotten.

Span of control: (the number of people reporting

directly to each manager). Wide span suitable for
highly motivated staff/those with routine jobs.
Narrow span needed when staff need a lot
of supervision/guidance from managers
Span of control examples:
Factors affecting span of control:
Trust: Management that trust staff usually have a wide span of control. No
close monitoring

Employee skills: Narrow span needed for staff with less skills/expertise

Tasks: Employees doing repetitive tasks need less supervision. Employees

with dangerous, complex tasks need a narrower span

Managerial workload: Managers have lots of roles to play a may need a

narrow span of employees to supervise to ensure they get everything done
Levels in an organisational structure:
Delayering:

Delayering involves removing one or more management layers in an

organisation structure.
Delayering:
Advantages of organising as a management
activity:
Management Activity 3:

Controlling
Controlling definition:
• Measuring how well a business does against it's objectives/goals. It
involves setting standards and measuring actual performance against
these standards. Corrective actions can then be taken if needed.

Areas that need to be controlled are:

Quality Credit

Stock Finance
Steps in controlling
Steps in controlling
1. Stock control
Def: A management activity that aims to keep optimum stock levels so
that the organisation doesn’t have too much stock or too little stock.

Decisions need to be made on minimum, maximum, re-order and

optimum level.
1. Stock control
• Minimum level: The lowest stock amount there should be
• Maximum level: The highest stock amount there should be. Can be
limited due to space available
• Optimum level: The ideal level of stock a business should have at a
certain time e.g. need more ice-cream in the summer months
• Re-order level: The level of stock at which a new order should be
placed
• Lead time: The time from an order being placed to receiving it
 Very
1. Stock control – how to manage it common
exam Q
Manual stock take: Employees physically counting and recording
everything there is in a shop. Checking against records should identify
any discrepancies e.g. due to theft

EDI: Allows for automatic re-ordering, lower costs, can track lead times
in real time, shorter processing times (from low stock to
replenishment)
 Very
1. Stock control – how to manage it common
exam Q
JIT (Just in Time):
Main features:
• Business holds minimum stock and gets regular deliveries – never
runs out
• Finished goods are completed just on time for consumers
• System must be carefully planned; disruptions can mean shortage in
raw materials for production
• Reduces business storage, insurance and security costs

https://www.youtube.com/watch?v=cAUXHJBB5CM
1. Stock control - Benefits
1. Stock control – dangers

Too much stock:

• Increased storage cost
• Increased insurance cost
• Stock going out of date/season

Too little stock:

• Loss of sales
• Customers may change supplier and may not return
2. Quality control - definition
A set of procedures used to check work completed to ensure it meets
the standards set. It aims to ensure goods are always of the highest
standards

The Sale of Goods and Supply of Services Act 1980 aims to regulate this

Businesses may have to offer redress if they do not meet certain

standards
2. Quality control - purpose
2. Quality control – How to achieve it
Businesses can achieve quality control in many ways:
2. Quality control – How to achieve it
1. Inspections:
Trained inspectors can inspect every finished good or a sample of
products produced at random ie. Sampling.
Most businesses will pick a random sample e.g. 5 packs of crisps of
every 200 produced – if they pass, then all 200 pass.

2. Quality circles:
A group of factory floor employees meet regularly to identify and
discuss quality issues. They recommend solutions and management can
decide what to do with the suggestions – accept/reject/amend.
2. Quality control – How to achieve it
3. Quality awards
Awards given by independent organisations when companies meet
certain standards. They encourage businesses to produce high quality
goods

Q Mark: Irish quality mark for Bord Bia Quality mark: ISO 9000 series: International
businesses that continuously Awarded to firms that produce award for firms with high
strive to improve quality and process food in Ireland that quality control standards e.g.
meets Bord Bia standards ESB

https://www.youtube.com/watch?v=AYBVTeqKahk
2. Quality control – How to achieve it
Benefits of quality control:
• Consumer trust – awards increase consumer trust
• Marketing – quality awards can attract customers
• Exports – some quality standards recognised internationally
• Pricing – can charge more for high quality goods
• Employee motivation – involvement in quality circles
• Reduced costs – less waste & repairs
• Improved quality
2. Quality control – How to achieve it
4. Total Quality Management (TQM):
Where the whole business aims to improve quality in all areas. Ongoing
improvements happen in every area of business.

Benefits of TQM:
• Customer satisfaction – increases sales & loyalty
• Quality awards
• Reduced costs
3. Credit Control - definition
Many firms sell on credit ie. The customer (creditor), buys now and pays
them later. Every time a business sells on credit they risk 'bad debts' (not
getting paid back/in full).

Def: Credit control ensures customers that pay on credit pp=ay bills in full
and on time. This will improve the businesses cash flow and give some ceray
bills in full and on time. This will improve the businesses cash flow and give
some certainty as to when businesses will be paid.

Businesses must manage their debtors (owe money to them) and creditors
(who they owe money to)
3. Credit Control - setting up a credit control
system
1. Set credit limits
Set a maximum limit you will give overall, and to individual customers
2. Check customers credit worthiness
Can ask for bank reference/trade reference/check Stubbs Gazette magazine
3. Efficient administration
Ensure to send out invoices and receipts on time and that they're correct
4. Debt collection procedures
Send reminders, offer discounts if customers pay early, charge interest on late
payments
3. Credit Control - benefits
4. Financial control - definition
A control method to ensure the business has enough money
to run the business. It ensures the business is profitable and
liquid (has enough money to pay bills as they're due)
4. Financial control – methods
4. Financial control – steps for effective control
1. Set targets
Involves preparing budgets – financial plans to predict income and expenditure
2. Compare results to targets
Are there differences between planned income and expenditure and actual
income and expenditure?
3. Investigate reasons for differences
If there are differences – why is this?
4. Take corrective actions
Managers must have a plan to ensure predicted cash flow is more accurate in the
future – they may need to borrow money
The importance of control (overall)
• To see if business goals are on track – compare actual
performance with set standards. Changes can then be made
for goals to be achieved
• Maximise resources – effective control can eliminate waste
by making fewer mistakes
• Employee motivation – employees involved in improving
quality can be more motivated
• Increased sales and profits – customers are loyal to firms
with high-quality products, can increase sales and profits
Key terms