ACCA F1 P3 Charles Handy Culture Types for Business Structures Influences.

ACCA F1, P3 Charles Handing Cultural Types

Charles Handy identifies the four culture types to explain how different cultures affect the businesses and organizational structures. He assigned each cultural type a name of Greek God. It does not influence the understanding of the cultural types. It is only written for your knowledge here.
Power culture (Zeus)
In power culture importance is given to person having power to take decisions. Power culture is like a dictatorship in which nearly no rules and regulation exists other than made by a dictator.
In power culture, decisions are taken on almost centralized basis and swiftly without involving others into discussion. Individual working in that culture cannot question the validity of decisions taken by person having the power. Rationality of decisions is just limited to the knowledge of the powerful person(s).
Power culture is usually associated with entrepreneurial business structure.
Commonly power is derived from legal ownership of the business. Example is corner retail shops.
Role Culture (Apollo)
In role culture importance is given to the position (role) of a person in the organizational hierarchy. However, the persons themselves are not important. No matter how specialist knowledge and experience they possess they cannot influence the decision outside their scope of role and responsibilities.
Roles are formally defined with the help of job descriptions and organizational charts. Business organizations have clear policies, procedures and authority/responsibility defined. Role culture is associated with Bureaucratic organizational structure.
Example is family run businesses where ethical standards do not permit to question rationality of decisions taken by senior family members.
Read more charles handy cultural types
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ACCA F1, P3 Intranets, Extranets and Internet Uses for Businesses.

ACCA F1, P3 Intranets, Extranets and Internet Uses

1. Intranets.
Intranets are network of work stations (PCs) who share information within limit area such as office floors or neighborhood buildings. Several workstations are connected through a high performance computer called server. Server acts as a regulator of intranet which has ability to allow or restrict access to information contained its hard drive in the form of database. Several hardware and software are required to establish intranet such networking cables, hubs, intranet server software (Windows server 2008), database management server based software (SQL) and intranet browsers just like internet browsers.


2. Extranets.
Extranet is similar to intranets in its basics but its scope is wider than intranet. It allow outsiders such as suppliers and customers to have access to information and update it when required. Extranet also connects the various intranets. Extranet can be used within the city or country depending on the communication network available such as telephone lines or satellite signals. Ordinary cable connections are not suitable for establishing extranets. Common example extranets are supermarkets where computer at point of sale is connected with suppliers computer and its own intranet. So the supplier access to information on sales demand and supplier can automatically get purchase order based on predefined inventory level.


3. Internet.
Internet is largest and complex form of network. Internet connects all the intranet, extranets and stand alone computers to form the global network known as internet. Websites are the information banks saved on web server which allows visitors access to its database containing files or web pages with the permission of its owner. Various intermediaries are involved in information sharing process like your ISP (internet service provider), information which you demand typing specific URL (universal resource locator) is passed through your ISPs high performance computer which has control over what you can access or not.




Uses of Internet to the Businesses.
Now a days, nearly all businesses are more or less affected by the internet depending on the industry in which they are operating. Example educational businesses is greatly affected by internet due to reduced traveling and communication cost and instant product downloads available over the internet. Read More ACCA F1, FAB, P3 What is Intranet, Extranet and Internet
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ACCA F1, F2, F5, P5 Informational Levels & Sources in business organizational structure.

Information can be categorized into three levels to reflect the business needs for decision making purpose.





Strategic Level Information	Strategic level information focuses on external environmental factors such as PESTEL factors. Strategic level information is summarized snapshot of business position and performance at any particular point in time. Strategic information is forward looking in nature. Information produced at this stage are forecasts (sales volume, cash flows), PESTEL analysis, risk analysis, major investment and financial planning. It is also arises due to Ad-hoc decision taken by strategic level managers to respond to external factors.
Tactical Level Information	Tactical level information is compiled form internal information in the form of feedbacks (reports and memos) from operational managers and management information system (MIS). It is a historical information used for planning and control. Information produced at this stage are budgets, variance analysis and individuals performance evaluation.
Operational Level Information	Operational level information originates internal in the organization. It arises due to operations of the business such as store ledger cards, creditor ledger and debtors ledger control accounts which arises because of  storing, purchasing and selling goods or services on credit.



List of some external and internal information. (this list is not exhaustive)


External Sources of Information.


1. Internet websites, social networking sites, forums etc.
2. Government publications such as monetary and fiscal policies.
3. Legal rules and regulations in the form of Acts (UK & US) or Ordinances (PK).
4. Press releases such as newspapers, technical magazines.
5. Professional educational training such as ACCA and CAT.
6. Marketing Promotional Materials.
7. Financial statements of other businesses.
8. Outsourcing and Consultancy firms.
9. Correspondence received from suppliers, customers and tax authorities etc.
   
   
   Internal Sources of Information.
   
   
10. Daily books such as sales day book, purchase day book and cashbook.
11. Invoices, goods received notes (GRN), Purchase requisition notes, Authorization Vouchers, Credit notes etc.
12. Reports from management accountants such as variance analysis and performance appraisal feedbacks.
13. other information sources such as attendance and payroll records, title deeds, register of shareholder, risk register and fixed asset register.
14. Senior management forecast on future sales demand, cash flow requirements.
15. Minutes of board meetings for deciding future strategies on new products and markets.
16. Policies, procedures and training manuals of the business to help employees understand their job and business expectations for them.
    
    
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Characteristics of Good Quality Information (ACCURATE).

Characteristics of good quality information can be defined as an acronym ACCURATE. These characteristics are interrelated; focus on one automatically leads to focus on other.

Accurate

Information should be fair and free from bias. It should not have any arithmetical and grammatical errors. Information comes directly or in written form likely to be more reliable than it comes from indirectly (from hands to hands) or verbally which can be later retracted.

Complete

Accuracy of information is just not enough. It should also be complete which means facts and figures should not be missing or concealed. Telling the truth but not wholly is of no use.

Cost-beneficial

Information should be analysed for its benefits against the cost of obtaining it. It business context, it is not worthwhile to spend money on information that even cannot recover its costs leading to loss each time that information is obtained. In other contexts, such as hospitals it would be useful to get information even it has no financial benefits due to the nature of the business and expectations of society from it.

User-targeted

Information should be communicated in the style, format, detail and complexity which address the needs of users of the information. Example senior managers need brief reports which enable them to understand the position and performance of the business at a glance, while operational managers need detailed information which enable them to make day to day decisions.

Relevant

Information should be communicated to the right person. It means person which has some control over decisions expected to come out from obtaining the information.

Authoritative

Information should come from reliable source. It depends on qualifications and experience and past performance of the person communicating the information.

Timely

Information should be communicated in time so that receiver of the information has enough time to decide appropriate actions based on the information received. Information which communicates details of the past events earlier in time is of less importance than recently issued information like newspapers. What is timely information depends on situation to situation. Selection of appropriate channel of communication is key skill to achieve.

Easy to Use

Information should be understandable to the users. Style, sentence structure and jargons should be used keeping the receiver in mind. If report is targeted to new-comer in the field, then it should explain technical jargons used in the report.

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Types of Business Organizational Structures

 
1. Entrepreneurial Structures.
   Entrepreneurial structure is the most basic form of business structure. It is a feature of small and growing business. It composed of the owner and its workers. Most business initially starts with this business structure, subsequently as business grows they changed into functional and divisional structures. This type of business structure can most seen in retail shops which require day to day attention of the owner cum manager.
   
   
2. Functional Structures.
   Functional structures is next to entrepreneurial structure regarding its complexity. Most medium to large sized business have this form of business structure in practice. It analyze all business processes into separate activities or tasks. Each function is responsible for performing these task, allocated based on expertise of personnel in that function to perform such . It allows all the similar work is gathered into one area of the business. It eliminates duplication of tasks and encourages economies of scale. Example purchasing computer by purchase department on centralized basis, this would allow them to gain bulk purchase discounts which would otherwise be not possible if every person is ordering computers separately.
   
   
3. Divisional Structures.
   Divisional structures is another form of business structure. It is found mostly in larger organizations. Divisional structure is often used to combination with functional structures. As the business grows in size it begin to offer its goods or service in geographical locations and deals in range of goods and services. Consequently, business begin to operate in Divisions by product, customer group and geo-location. Manager is appointed to manage the business for each product or geo-location to manage the profitability of product or operate the business in particular location taking into account culture and risk of that location.
   
   
   Each division has its own functional departments. They account for its own cost and earns revenue within authority granted to them. You can imagine them just like separate business and each separate businesses are united to form large business unit.
   
   
4. Matrix Structures.
   Matrix structures are the most complicated business structures and most difficult to manage. Matrix structures are feature of large multi-national companies who have expertise and resources to manage such structures. Some industries and innovative fields in which products are non-repetitive and technical in nature uses this type of business structure like construction business in which each building in different from each other. Matrix structure is a combination of functional and divisional structure. In this business structure each employee has two bosses, one is the functional manager and the each is product or geo-location wise divisional manager. Example employee in the production department is responsible to production manager (Civil engineer) for production scheduling and also responsible to product manager (Sale manager) to report on likely completion date of the product (building).
     
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