L3 - Planning & Budgeting Flashcards

1
Q

What are the products of planning?

A

Objectives, budgets, schedules, performance standards and a baseline to measure evaluate performance.

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2
Q

What does effective Planning & Budgeting require?

A

Looking at organization as a SYSTEM and understanding the RELATIONSHIP among its components.

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3
Q

Planning

A

Planning consists of developing the objectives, timetables and performance standards needed to implement the organization`s strategy and assigning individual accountability for results.

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4
Q

Budgeting

A

Budgeting involves identifying, prioritizing, acquiring and allocating the RESOURCES needed to carry out the plan.

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5
Q

Strategic thinking VS Planning

A

Strategic thinking is a creative activity whereas planning is an analytical one.

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6
Q

The budget contains

A
  1. Strategic goals
  2. Operational goals
  3. Action plans for Sales, Sourcing and Procurement, HR, CapEX, company financing
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7
Q

2 approaches for Budgeting

A

Top-down and Bottom-Up

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8
Q

Bottom-Up budgeting + and -

A

+ Every step might be planned accurately, involves individuals of all levels within the organisation (not only decision-makers)
- Easy to over-budget

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9
Q

Top-down budgeting + and -

A

+ Establish organizational PRINCIPLES

- lower level employees are excluded from the process

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10
Q

3 levels of corporate planning

A

Liquidity Level (short-term) to ensure the solvency of the company

Success Level (mid term) to ensure the profitability of the company

Potential Level (long-term) to ensure the future of the company

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11
Q

6 steps of Corporate Planning

A
  1. Developing the strategy
  2. Translating the strategy
  3. Shaping the organization
  4. Operational planning
  5. Controlling and lessons learned
  6. Testing and adapting
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