Business Management Chapter 7 Quiz

Study Notes

Overview of Organisational and Management Plan

Defines the structure and management framework of a business project.
Key elements include legal form, organisational structure, management team credentials, and estimation of expenses.

Legal Form of Business

Different forms include sole proprietorship, partnership, and corporations.
Choice of form should be justified based on business goals and requirements.

Business Name and Logo Design

The organisational plan must state the chosen business name and include its logo.
Name and logo should be unique and comply with legal intellectual property requirements.

Capability of Proponents

Profile should highlight educational and professional qualifications, skills, and relevant experiences of founders or key team members.

Organisational Structure

Visual representation (organogram) should define roles, responsibilities, and reporting lines.
Different structures include line, line and functional, or matrix models.

Key Positions and Roles

Essential roles derived from organisational structure must have clear definitions of responsibilities and reporting.

Recruitment, Selection, and Training Strategies

Recruitment: Identify sources such as internal promotions, job advertisements, and referrals.
Selection: Develop a criteria-based process involving interviews, testing, and reference checks.
Training: New hires require comprehensive training programs for effective job performance.

Cost of Administrative Personnel

Details on personnel costs should be thoroughly documented, including salaries and benefits projected over three years.

Noncurrent Assets for Administration

List of necessary assets includes office furniture, computers, and vehicles.
Details should cover specifications, prices, estimated lifespan, and applicable depreciation rates.

Maintenance of Noncurrent Assets

Establish a maintenance plan for all administrative equipment to ensure efficiency and longevity.

Office Layout

The arrangement of office furniture and equipment should enhance workspace functionality.
A proposed layout should be created to visualize the office environment.

Pre-operating Activities and Expenses

Document expenses incurred before business operations commence, including feasibility studies and legal registrations.
Classify expenses as either capitalized or expensed based on the significance.

Organisation and Management Overhead Costs

Overhead expenses include salaries, office supplies, utility bills, training, licensing fees, and maintenance costs.
A projection of these expenses should span three years.

Summary of Total Organisation and Management Expenses

Key expense items to track include repairs, donations, miscellaneous costs, depreciation, and pre-operating expenses.

Assumptions for Expense Estimations

Clear and factual assumptions must support estimates for salaries and operational costs, ensuring transparency for users of the plan.

Learning Activity

Encourages application of learned concepts to draft a comprehensive organisational and management plan for a proposed business, covering all outlined components.

Description

Test your knowledge on the organizational and management overhead costs as covered in Chapter 7 of the business management text. This chapter dives into the elements of an organizational and management plan, including legal forms, structures, and roles. Prepare to assess key concepts that are crucial for successful business planning.