P92 Ch 3

  1. Types of plans
    • Strategic / corporate plans
    • Operational plans
    • Budgets
  2. Areas covered within strategic & corporate plans
    • setting objectives
    • identifying what needs to be done for these objectives to be achieved
    • creating the most appropriate structure
    • allocating management duties and responsibilities to senior managers
    • agreeing & establishing a consistent management style
    • agreeing & setting budgets
    • agreeing staff incentives
    • setting sales targets
    • planning the most efficient use of material resources
    • setting timetables & deadlines
    • identifying contingency plans
  3. Points to consider in an action / business plan...
    • objectives
    • strategy for achieving objectives
    • specific activities that will be undertaken
    • allocation of specific responsibilities
    • start & end dates of each activity
    • estimated resource requirement
    • expected cost of activities
    • expected results
  4. Types of control models
    • management accounting
    • budgeting
    • critical success factor
    • key performance indicators
    • balanced score cards
    • benchmarking
    • management by objectives
  5. What are critical success factors (CSFs)?
    CSFs are areas that are critical to a company realising their mission either by exploiting opportunities or by fending off dangers posed by external threats of internal weaknesses. Once a CSF has been identified it is aligned with an action point.
  6. Differentiate between results & effort orientated KPIs
    • results >> bottom line
    • effort >> level of effectiveness being achieved
  7. Perspectives in balance scorecards...
    • financial
    • internal
    • customer
    • learning & growth
  8. Definition of budget
    ...a financial or quantitative statement prepared in advance of a specific accounting period. It typically covers a short period of months (up to a year).
  9. Advantages of budgeting
    • Unification of effort
    • Planning
    • Motivation
    • Control
    • Basis of comparison
    • Financial awareness
  10. Steps in the budgetary process
    • Guidelines from the Chief Executive
    • Consultation & preparation
    • Review by budget committee
    • Communication
    • Monitoring
  11. Methods of budgeting
    • "Top down"
    • "Bottom up"
    • Fixed
    • Flexible
    • Zero based budgeting (ZBB)
    • Rolling budgets
  12. Causes of variances in budgets
    • Inappropriate standard
    • Inaccurate recording of actual costs and revenues
    • Random events
    • Operating efficiency
  13. Steps in the decision-making process
    • Understanding why a decision must be taken
    • Prior consideration & discussion of the options
    • Taking the most appropriate decision
    • Review
  14. 5 Cs of decision making
    • Consider
    • Consult
    • Crunch
    • Communicate
    • Check
  15. Define knowledge management...
    ...the compilation and redistribution of an organisation's skills and experience for the benefit of the organisation as a whole. The two main strategies are codification and personalisation.
  16. Points to consider when deciding how to disseminate MI
    • Clarity is key
    • Managers need to tailor their communication to their recipients
    • Managers should ensure that info relating to impending action genuinely pre-empts any action
    • Written information >> quick & easy to distribute but their is scope for interpretation and can be seen as impersonal
    • Discuss issues at meetings with staff >> personal; opportunities for questions & clarification
    • Planned changes that affect staff should be communicated as early as possible
Card Set
P92 Ch 3
Management of the insurance business: planning & control