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Questions and Answers
Which of the following is NOT a component of an organizational and management plan?
The logo of a business can be a replication of existing logos if it is slightly modified.
False
What is an organogram?
It is a visual representation of an organizational structure showing roles and lines of reporting.
The organizational plan must clearly state the business's __________.
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Match each type of business form with its description:
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Which of the following is NOT a common source of recruitment?
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The training strategy occurs before the selection of candidates.
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What is the purpose of a recruitment strategy?
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The first step in the selection process is the ______.
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Match the following recruitment sources with their descriptions:
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What is the purpose of assumptions in the context of noncurrent asset requirements?
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Pre-operating expenses can be capitalized and amortized over three years if deemed significant.
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Name two activities that may incur pre-operating expenses.
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The planned layout of the office must be ___ and presented.
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Match the following terms with their descriptions:
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Which of the following is NOT a pre-operating activity?
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The total pre-operating expenses are included in the organisation and management overhead costs.
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Name one expense item that is considered part of organisation and management overhead costs.
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Obtaining samples is a part of ______ expenses.
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Match each item with its category:
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Which of the following is an example of an expense incurred during organisation and management?
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Electricity and water costs are classified as pre-operating expenses.
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What is the purpose of estimating pre-operating expenses?
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What is a key component of orienting and training new employees?
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The cost of administrative personnel includes both salary and benefits.
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What types of equipment are considered noncurrent assets for administration?
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The total cost of administrative personnel can be projected using __________.
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Match the following terms with their descriptions:
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Which of the following is NOT a component required for preparing an organisation and management plan?
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Estimations for salaries and expenses must be made based on relevant data and applicable rules.
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What is the purpose of Learning Activity 7.1?
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The total organisation and management expenses before depreciation and __________ expenses must be clearly stated.
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Match the components required for an organisation and management plan with their descriptions:
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Study Notes
Organizational and Management Plan Overview
- The organizational and management plan is a key component of the business plan, outlining the legal structure, organizational hierarchy, management credentials, and financial estimates.
- This plan highlights the business's legal form, key roles, and noncurrent asset requirements.
Legal Form of Proposed Business
- Defines three main business forms: sole proprietorship, partnership, and corporation.
- Entrepreneurs must explain their choice of business type.
Business Name and Logo
- The plan should specify the chosen business name and include a logo, which should be unique and comply with intellectual property laws.
- Legal naming requirements must be honored to avoid duplication.
Capability of the Proponents
- A detailed profile of the proponents should include educational qualifications, professional experience, skills, and relevant background information.
Organizational Structure
- The proposed business should depict a clear organizational structure that defines roles, communication lines, and reporting relationships.
- Different organizational models such as line and functional structures can be utilized.
Key Positions and Roles
- Identification of key positions is crucial, with clearly described responsibilities associated with each role.
Recruitment, Selection, and Training of Staff
- Recruitment Strategy: Methods to attract applicants include internal transfers, advertisements, educational institutions, and employee referrals.
- Selection Strategy: Procedures should encompass preliminary interviews, application checks, and tests tailored to job requirements.
- Training Strategy: New employees must receive thorough orientation and ongoing training for effective performance.
Estimation of Pre-Operating Expenses
- Pre-operating expenses involve costs incurred before business commencement, including feasibility studies, registrations, and supplier agreements.
- Significant pre-operating expenses may be capitalized and amortized, typically over three years.
Organization and Management Overhead Costs
- Overhead costs encompass salaries, office supplies, utility bills, and maintenance of noncurrent assets.
- A comprehensive projection of these costs is essential for financial planning over a three-year period.
Assumptions
- Assumptions related to asset requirements, pricing, and longevity are necessary for accurate financial estimations and must be explicitly stated for clarity.
Noncurrent Assets Requirement for Administration
- Noncurrent assets such as computers, printers, and office furniture are vital for administrative functions.
- Detailed specifications, quantities, purchase prices, and depreciation estimates should be included.
Office Layout
- The office layout refers to the strategic arrangement of equipment and furniture to facilitate efficient workflow.
Organizational and Management Expenses
- Expenses must be thoroughly outlined before accounting for depreciation and pre-operating costs to give a complete overview of organizational financial health.
Learning Activity
- Students are encouraged to create a comprehensive organizational and management plan for a proposed business using provided components, ensuring alignment with previously learned concepts.
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Description
Test your knowledge on the organizational and management overhead costs as outlined in Chapter 7 of the business plan. This quiz covers key concepts such as the organizational structure, management team roles, and asset requirements. Perfect for students looking to deepen their understanding of business planning.