ACCA P3 flashcards – set 2

See also ACCA P3 Flashcards: Set 1 | Set 2 | Set 3 | Set 4


Draw and annotate Mendelow’s Matrix

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What are the four descriptions of change in terms of scope of change and nature of change?

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Adaptation (nature = incremental and scope = realignment)
Evolution (nature = incremental and scope = transformation)
Reconstruction (nature = big bang and scope = realignment)
Revolution (nature = big bang and scope = transformation)

What are the three levels or categories of business process change?

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* Automation,
* Rationalisation
* Business process engineering.

What is a ‘shamrock organisation?

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Handy defines a shamrock organization as a ‘core of essential executives and workers supported by outside contractors and part-time help’.

What is a span of control and how does it differ between tall narrow and wide flat structures.

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The span of control (SoC)l is the number of people directly reporting to a manager. In a tall narrow structure the SoC is low; in a wide flat structure the SoC is large.

What are the characteristics of a professional bureaucracy in terms of Mintzberg’s structures?

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Relatively short middle line and a small technostructure.
Because each job is different in a professional firm, there has to be close liaison between the strategic apex and the operating core and the technostructure has limited opportunity to enforce a standard approach.

What are the five elements of Mintzberg’s organisation forms?

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Strategic apex,
Middle line,
Operating core,
Support
Technostructure.

Describe what is meant by the term ‘matrix structure’?

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In a matrix structure, each employee has responsibilities to more than one superior. Eg, in project management an engineer could be responsible to the project manager and to the engineering manager.

What are the main ways in which a business can be divisionalised?

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By market and by product

What is the name of the business structure which is organised as accounting, manufacturing, sales, IT etc?

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This is a functional structure as it organises the business by function (or department).

What are the two axes on the Mckinsey/General Electric grid?

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SBU strength and market attractiveness.

In the Ashridge Portfolio display explain the terms: heartland business, ballast business, value trap and alien business.

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Heartland: high benefit and high feel. The subsidiary needs help and the holding company can supply it.
Ballast business: low benefit and high feel. No help is needed
Value trap: high benefit and low feel.
Alien business: low benefit and low feel.

In the Ashridge Portfolio Display, what is meant by the terms ‘Benefit’ and ‘Feel’?

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Feel = the fit between the SBUs critical success factors (what it needs to be good at) and what head office could supply to help the SBU achieve those critical success factors.
Benefit = the opportunities to the SBU achieve its critical success factors.

How does the portfolio manager’s approach to portfolio management work?

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It’s a hands-off style.
Subsidiary companies are given financial targets and then left to get on with achieving those.
If targets are attained then all is well. If they are not attained then the subsidiary might be sold or management changed.

What are Johnson, Scholes and Whittington’s three styles of portfolio management?

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* Portfolio managers,

* Synergy seekers

* Parental developers.

What is meant by the terms ‘backward integration’ and ‘forward integration’?

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Backward integration is taking over (or setting up) a supplier;
Forward integration is taking over (or setting up) a customer or supply chain.

What are the two classes of diversification?

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Related and unrelated diversification.

In Ansoff’s matrix, what is selling a new product to an existing market known as?

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Product development

In Ansoff’s matrix, what is moving to a new market with an existing product known as?

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Market development

What can a company do to increase its profits if it stays with existing products and existing markets?

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Market penetration,
Efficiency gains,
Withdrawal,
Consolidation.

What are the axes of Ansoff’s matrix?

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Products (existing and current); markets (existing and current)

What are the potentially successful strategies as set out on the strategic clock?

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No frills, low price, hybrid, differentiator, focussed differentiator.

What are Porter’s three generic strategies?

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Cost leadership,
Differentiation,
Focus.

What are the support activities of the value chain?

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Firm infrastructure,
Human resource management,
Technology development,
Procurement

What are the primary activities of the value chain?

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Inbound logistics,
Operations,
Outbound logistics,
Sales and marketing,
Service.

In BCG terms, what is meant by a balanced portfolio of products?

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Some cash cows to generate lots of cash (but cash cows are heading towards market decline), and some problem children needing investment.
The cash generated by the cash cows can be used to build the problem children into star products that will become the cash cows of the future.


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