2016 BPP PASSCARD F1

Informal Organisational Levels of strategy Centralisation and organisation structure in the organisation decentralisation Further structural concepts 1 Entrepreneurial Dominated by a single entrepreneur or management team 2 Functional Structured by function, for example Production, Finance, Marketing 3 Matrix Cross-functional teams 4 Divisional A corporate centre and a number of strategic business units (SBUs) 5 Boundaryless Eliminate barriers that separate hierarchy and functions. Examples include modular (different components outsourced to different suppliers), virtual (dispersed physically but together on the internet) and hollow (all non-core activities outsourced) 6 Outsourcing Contracting out specific activities to an external vendor 7 Offshoring Sending work to a different country 8 Shared services Establishing a service centre to provide a support function across an organisation

SPAN OF TALL V SCALAR CONTROL FLAT CHAIN Number of subordinates Tall Flat Chain of command Page 47 5: Business organisation, structure and strategy

Informal Organisational Levels of strategy Centralisation and organisation structure in the organisation decentralisation Levels of strategy CORPORATE STRATEGY What businesses are we (or want to be) in? How do we enter or exit? BUSINESS BUSINESS BUSINESS STRATEGY STRATEGY STRATEGY Strategies relevant to a particular area Strategic SBU SBU Business Unit (SBU)

FUNCTIONAL STRATEGIES R&D OPERATIONS MARKETING HRM IT/IS FINANCE ¡ Products ¡ Capacity ¡ Orientation ¡ Recruitment ¡ Systems ¡ Sources ¡ Processes ¡ Process technology ¡ Marketing mix ¡ Selection ¡ Technology ¡ Uses ¡ Design ¡ Work flows ¡ Product planning ¡ HRD ¡ Management ¡ Development ¡ Quality ¡ Marketing information ¡ Appraisal ¡ Testing ¡ Outsourcing ¡ Segmentation ¡ Reward ¡ Services STRATEGIES INVOLVING MANY FUNCTIONS (EG CHANGE MANAGEMENT, TOTAL QUALITY, RE-ENGINEERING) This diagram reflects the Anthony hierarchy Strategic management (ie corporate) – 'direction setting' Tactical management (business) 'day to day Operational management (functional) management' Page 49 5: Business organisation, structure and strategy

Informal Organisational Levels of strategy Centralisation and organisation structure in the organisation decentralisation A centralised organisation is one in which author ity is concentrated in one place. Advantages of centralisation Advantages of decentralisation Easy co-ordination of decisions Avoids heavy workloads Wider view can be taken Improves motivation of junior managers Different interests can be balanced Greater awareness of local issues Quality of decisions higher (in theor y) Greater speed of decision-making Cheaper to run Develops the skills of junior managers Crisis decisions taken quickly Controls and direct accountability are clearer Standardised policies and procedures Use of communication technology allows local decision making, with HO input if required

6: Organisational culture and committees Topic List The concept of culture is impor tant when thinking about how organisations work. Organisation culture is, broadly, Organisational departments and the distinctive way an organisation does things. Particular functions structures suit particular cultures, and these are Organisation culture reinforced by informal networks. Culture and structure Committees are also considered – they are one of the Committees main mechanisms for organisational consultation and communication.

Organisational Organisation Culture and Committees departments and functions culture structure Research & Purchasing Production Development Quantity, quality, Creating outputs from price, delivery Finance Product and inputs, with added process FUNCTIONS value raising money; working capital Service management; recording and controlling; operations providing information; strategic planning; Specific nature and dimensions such as issues of intangibility, reporting to stakeholders; 'financial inseparability and reliability. management'; 'management of finance'. No physical product Financial Treasury Management accounting accounting Human Administrative Marketing resources Usually at head Effective use of people as Marketing mix: 4Ps an asset office Product; Place; Promotion; Price.

Organisational Organisation Culture and Committees departments and functions culture structure Organisation culture Underlying attitudes to (for example): – The customer, quality Organisation culture is the complex body of shared – Risk, learning, mistakes beliefs, attitudes and values in an organisation. – Work, the organisation, management Overtly expressed beliefs (slogans, mottos, Aspects of culture standing jokes and so on) Beliefs and values Customs: norms, acceptable ways of behaving, To create or change a culture 'unwritten rules' Artefacts: buildings, decor, dress rules, display Model desired behaviours/attitudes from the top of 'trophies', style of relationships, types of Express desired values (eg in mottos, literature) people employed Practise leadership: create an inspiring vision Rituals: formal repeated behaviours, Recruit and select people who will fit the ne w culture ceremonies, celebrations Appraise, reward and promote according to cultural Symbols: signs of status and success, criteria: encourage people to 'buy in or get out' corporate logos, badges of identity and so on Symbolise the values in visible expressions of 'style' Page 53 6: Organisational culture and committees

Organisational Organisation Culture and Committees departments and functions culture structure Charles Handy ('Gods of management'): four 'ideal' cultural types (after Roger Harrison) Zeus Power culture Role culture Apollo The organisation is controlled by a Classical, rational organisation: key central figure, owner or founder. bureaucracy. Stable, slow-changing, Power is direct, personal, informal. formalised, impersonal. Authority Suits small organisations where based on position and function. people get on well. Athena Task culture Person culture Dionysus •••• Management is directed at outputs: The purpose of the organisation is to •••• problems solved, projects completed. serve the interests of the individuals Team-based, horizontally-structured, who make it up: management is flexible, valuing expertise – to get directed at facilitating, administering. the job done.

It is possible for different cultures to prevail within the same organisation, so a contingency approach is often required. Handy matched his cultural types with Anthony's classification of managerial activity: Strategic management direction setting power culture Tactical management mobilising resources task culture Operational management routine activities role culture The Hofstede model describes four main dimensions of difference between national cultures. Power distance Uncertainty avoidance Individuality vs Masculinity vs Page 55 collectivity femininity 6: Organisational culture and committees

Organisational Organisation Culture and Committees departments and functions culture structure Committees are a key part of organisational communication processes. Purpose Types Possible disadvantages Too large sometimes New ideas Executive Time consuming Communication Standing Expensive Participation and problem- Ad hoc Compromises made solving Sub-committees Combining abilities Joint committees The Secretary circulates Co-ordination Management committees minutes and action points Representation of interests The benefits justify the cost Giving advice Committees work best when There is plenty of time to Recommendations There are well defined areas of make decisions authority Supported by: The Chair is an effective leader The Committee Chair and The committee itself is not too large Secretary The members have the necessary experience

7: Corporate governance and social responsibility Topic List This chapter covers the main areas of cor porate governance, the role of the board in comm unicating with Principles of corporate governance shareholders and corporate social responsibility. Developments in corporate governance Role of the board Governance reporting and corporate social responsibility Ethics, law, governance and social responsibility

Principles of Developments in Role of Governance reporting and Ethics, law, governance corporate governance corporate governance the board corporate social responsibility and social responsibility There are different views associated with the ownership and management of organisations: STEWARDSHIP AGENCY STAKEHOLDER THEORY THEORY THEORY managers are stewards of managers seek to look after management has a duty of the assets their own interests care to stakeholders Governance principles Minimise risk via Establish clear accountability Balance required: Strategic compliance Maintain independence Corporate 'performance' Adherence to strategic Accurate/timely reporting governance vs objectives Encourage owner Fulfil stakeholder involvement 'conformance' responsibilities Promote integrity

Principles of Developments in Role of Governance reporting and Ethics, law, governance corporate governance corporate governance the board corporate social responsibility and social responsibility Corporate governance is the system by which organisations are directed and controlled b y senior officers. Risk Supervision Framework for Driving forces reduction and ethical and Internationalisation/globalisation Treatment of investors management effective dealings Financial reporting issues ADVANTAGES Cultural significance High profile scandals Accountability Apply the spirit as well as the letter of the law Backed up by: Accounting standards Codes of professional conduct Commissions on standards of behaviour Page 59 7: Corporate governance and social responsibility

Principles of Developments in Role of Governance reporting and Ethics, law, governance corporate governance corporate governance the board corporate social responsibility and social responsibility Features of poor corporate governance Domination by a single individual Lack of independent scrutiny Lack of involvement of board Lack of contact with shareholders Lack of adequate control function Emphasis on short term profitability Lack of supervision Misleading accounts and information

Principles of Developments in Role of Governance reporting and Ethics, law, governance corporate governance corporate governance the board corporate social responsibility and social responsibility If the board is to act effectively, its role must be defined carefully. Role of the board Responsible for taking major policy and strategic decisions Mix of skills and relevant expertise Regular performance assessment and increased accountability Formal procedures administered by a nomination committee Balance between executive management and independent non-executive directors Role of Chair and chief executive to be held by two different people (not mandatory in the UK) Remuneration set by a remuneration committee Regular review of risk management and internal control Audit committees to liaise with external audit and review accounts/controls Page 61 7: Corporate governance and social responsibility

Principles of Developments in Role of Governance reporting and Ethics, law, governance corporate governance corporate governance the board corporate social responsibility and social responsibility Annual reports must convey a fair and balanced view of the organisation, stating whether the organisation has complied with governance regulations and codes: Narrative statement on how principles have been applied Statement on compliance throughout accounting per iod Strategies for social responsibility Proactive – full responsibility Defence – minimising or avoiding obligations Reactive – unresolved until others find out! Accommodation – taking responsibility, when encouraged Summary Corporate governance requirements and social responsibility may be seen as additional r ules and guidance for companies and individuals. They bridge the gap between what the law requires and what society expects.

Principles of Developments in Role of Governance reporting and Ethics, law, governance corporate governance corporate governance the board corporate social responsibility and social responsibility The relationship between law, governance, social responsibility and ethics Law Corporate governance Social responsibility Ethics No regulation. Rules individuals and Publicly listed Individuals and Values and principles. companies must follow. companies only are companies have a free Individuals and regulated. Others are choice. Some social companies are expected The minimum level of encouraged to follow pressure to act in a to follow. behaviour society allows. ‘best practice’. socially responsible Adopting an ethical manner. position is down to free choice. More regulation, less freedom of choice. Less regulation, more freedom of choice. Page 63 7: Corporate governance and social responsibility

Principles of Developments in Role of Governance reporting and Ethics, law, governance corporate governance corporate governance the board corporate social responsibility and social responsibility Society’s Law ethics Pressure for social responsibility EXTERNAL Corporate governance PRESSURES INTERNAL (decisions of directors) PRESSURES Director’s Needs of Business needs to ethics shareholders appear socially responsibility

8: The role of accounting Topic List This chapter introduces some basic ideas about accounts and accounting information and its purpose. The purposes of accounting information The operation of financial systems is also considered. Nature, principles and scope of accounting The regulatory system Control over transactions The main financial systems Computerised accounting and databases

The purposes of Nature, principles and The regulatory Control over The main Computerised accounting information scope of accounting system transactions financial systems accounting and databases Accounting is a way of recording, analysing and summar ising the transactions of a business. The accounting function also provides information and advice to other depar tments. Influences on the accounting Formalised and procedural, to comply system with wide range of regulations Size Type of organisation Organisation structure Good accounting information Users Relevance Objectivity Managers Employees Comprehensibility Timeliness Shareholders Analysts and Reliability Comparability Trade contacts advisers Completeness Finance providers HM Revenue & Government Customs The public

FINANCE DIRECTOR TREASURER FINANCIAL CONTROLLER MANAGEMENT ACCOUNTANT CASHIER FINANCIAL ACCOUNTANTS COST ACCOUNTANTS Non-current asset register Cost accounting Receivables ledger – inventory reporting and valuation Debt collection – materials costing Credit control – labour costing/payroll Payables ledger – expense and overheads costing Wages and salaries (payroll) – job costing (contract costing Financial accounts (general – process costing) ledger, quarterly accounts etc) – budgetary control reports Statutory accounts Sales tax (VAT) returns (eg variance analysis) Taxation Management accounting – budget co-ordination Page 67 – analysis and investigations – project appraisal 8: The role of accounting

The purposes of Nature, principles and The regulatory Control over The main Computerised accounting information scope of accounting system transactions financial systems accounting and databases Financial accounting The method for reporting the results and financial position of a b usiness, which must then be audited. Management (or cost) accounting Management information system which analyses data to provide information as a basis for managerial action. Note the distinction between: Reporting to vs Internal external parties information for planning and (financial) control (management) These are both distinct from financial management, which deals with raising finance and controlling financial resources (such as borrowings, dividends, capital expenditure, credit policies).

The purposes of Nature, principles and The regulatory Control over The main Computerised accounting information scope of accounting system transactions financial systems accounting and databases Factors which have shaped financial accounting: Factors which have shaped financial accounting: Company law Accounting concepts and individual judgement (eg on v aluations or R&D) Accounting standards (for comparability) The European Union Other international influences (eg IASB and global accounting standards) Generally accepted accounting practice (GAAP) 'True and fair view' Page 69 8: The role of accounting

The purposes of Nature, principles and The regulatory Control over The main Computerised accounting information scope of accounting system transactions financial systems accounting and databases Common Purchasing – raw materials or goods Rules and procedures functions Human resources – staff and their w elfare will govern each, eg Finance – transactions, cash balances authorisation policies Sales and marketing – orders and advertising for the purchase of General administration – wide ranging, eg secretarial support non-current assets Transactions SALES PURCHASING Making sales Order Purchase order Making purchases Paying expenses CUSTOMERS Sales order Purchase order SUPPLIERS Paying employees Purchasing non-current assets Invoice Invoice Dependent upon effective Payment RECEIVABLES Payment systems and procedures LEDGER PAYABLES LEDGER Transaction data Transaction data GENERAL LEDGER Accounting data MANAGEMENT INFORMATION SYSTEM

The purposes of Nature, principles and The regulatory Control over The main Computerised accounting information scope of accounting system transactions financial systems accounting and databases PAYROLL PURCHASES SALES CASH Key controls: Key controls: Key controls: Cash and petty cash must be regularly and Documentation/ Authorisation Authorisation fully recorded, authorisation (buying) (selling) reconciled but funds Calculation of Custody (goods Custody (goods transfer is generally by: wages/salaries inwards) outwards) Payment of wages/ Accounting Accounting Company cheque salaries (recording) (recording) Bank transfer Authorisation of Internet transfer deductions Standing order Direct debit Inputs each system has these Processing Outputs Page 71 8: The role of accounting

The purposes of Nature, principles and The regulatory Control over The main Computerised accounting information scope of accounting system transactions financial systems accounting and databases The most important point to remember is that the pr inciples of computerised accounting are the same as those of manual accounting. The same terms are used (day book, ledgers, double entry, trial balance etc). Information is expressed via codes. An accounting package consists of several accounting modules (eg receivables ledger). Manual systems inferior to computers Possible modules Each module may in some areas: be integrated with Invoicing the others, so that Productivity Ease of alteration Inventory all modules are Speed Quality Sales updated by one data Error rate Bulk Purchases entry, eg sales and Accessibility General ledger inventory modules Payroll both updated by the Cash book despatch of an Job costing invoice to a Non-current asset register customer Report generator

Decision Spreadsheet General support facilities ledger system module Executive Payroll information module system Receivables Payables Inventory Non-current module module module assets Job costing module Page 73 8: The role of accounting

The purposes of Nature, principles and The regulatory Control over The main Computerised accounting information scope of accounting system transactions financial systems accounting and databases A database is a pool of data, which can be used b y any number of applications. Its use is not restricted to the accounts department. Main virtues Input data Common data to share No duplication of files User Database Database No inconsistent data queries management Needs to: system Application Be shared programs Be up to date Be relevant for all users Be capable of evolving Sales Branch and Staff Other Note also the use of spreadsheets – applications personnel payroll applications* essentially an electronic piece of paper statistics etc statistics etc analysis etc which provides an easy way of performing numerical calculations. * The range of applications which make use of a database will vary widely, depending on what data is held in the database files.

9: Control, security and audit Topic List This chapter discusses the main elements of inter nal control systems that organisations operate. Internal and Internal control systems external audit are a large par t of such systems, as are Internal control environment and issues related to computerised information. procedures Internal audit and internal control External audit IT systems security and safety Building controls into an information system

Internal Internal control Internal audit and External IT systems Building controls into control systems environment and procedures internal control audit security and safety an information system Internal controls Help organisations to counter risks, maintain the quality of repor ting and comply with laws and regulations. They consist of actions taken by management to enhance the likelihood that established objectives and goals will be achieved. INTERNAL CONTROL SYSTEM Supported by: Control Control Information and communication environment procedures processes Overall context Detailed controls Monitoring Limitations include: potential for human error; collusion; management override; dealing with non-routine transactions.

Internal Internal control Internal audit and External IT systems Building controls into control systems environment and procedures internal control audit security and safety an information system The control environment S egregation of duties This is the overall attitude, awareness and actions of P hysical directors and management regarding internal controls A uthorisation and approval and their importance. It is reflected in the philosophy M anagement and operating system of the organisation. Classification of control and/or S upervision procedures O rganisation A rithmetical and accounting Administration and accounting Prevent, detect and correct P ersonnel Discretionary and non-discretionary Voluntary and mandated Remember that internal controls should not be confused with Manual and automated internal checks, which have a more restricted definition as General and application checks on day-to-day transactions. Financial and non-financial Page 77 9: Control, security and audit

Internal Internal control Internal audit and External IT systems Building controls into control systems environment and procedures internal control audit security and safety an information system Characteristics of a good internal control system Clearly defined organisation structure Adequate internal checks Acknowledgement of work done Physical security Formal documentation Pre-review System for authorising transactions Post-review Authorisation, custody and re-ordering procedures Personnel with necessary capabilities/qualifications Internal audit department

Internal Internal control Internal audit and External IT systems Building controls into control systems environment and procedures internal control audit security and safety an information system Internal audit Independent, internal appraisal activity – examining and evaluating the adequacy and effectiveness of other controls. Its two main features are independence and appraisal. Objectives Types Review of the accounting and inter nal control systems Operational Examination of financial and operating information Systems Review of economy, efficiency and effectiveness Transactions Review of compliance Social Review of asset safeguards Management investigations Review of implementation of corporate objectives Identification of risks, and risk management Special investigations into any aspect of the organisation The internal auditor is accountable to the highest executive level in the organisation, preferably the audit committee of the Board of Directors. Page 79 9: Control, security and audit

Internal Internal control Internal audit and External IT systems Building controls into control systems environment and procedures internal control audit security and safety an information system External audit is the periodic examination of the books of account and records of an entity carr ied out by an independent third party to ensure that they have been properly maintained, are accurate and comply with established concepts, principles, accounting standards, legal requirements and give a true and fair view of the financial state of the entity. Internal audit External audit Reason Internal audit is an activity designed to add External audit is an exercise to enable auditors to value and improve an organisation's operations. express an opinion on the financial statements. Reporting to Internal audit reports to the board of directors, The external auditors report to the shareholders, or or others charged with governance, such as the members, of a company on the stewardship of the audit committee. directors. Relating to Internal audit's work relates to the operations of External audit's work relates to the financial Relationship the organisation. statements. They are concerned with the financial with the Internal auditors are very often employees of records that underlie these. company the organisation, although sometimes the External auditors are independent of the company internal audit function is outsourced. and its management. They are appointed by the shareholders. Internal audit has a much wider scope than external audit.

Internal Internal control Internal audit and External IT systems Building controls into control systems environment and procedures internal control audit security and safety an information system Security covers the protection of data from accidental or deliber ate threats, and the protection of an information system from such threats. Aspects of security Physical threats Physical access Prevention controls Detection Fire need Deterrence Water for PINs Recovery Weather Door locks Correction Terrorism Card entry systems Threat avoidance Accidents Logs Sabotage Computer theft Page 81 9: Control, security and audit

Internal Internal control Internal audit and External IT systems Building controls into audit security and safety an information system control systems environment and procedures internal control Such controls can be classified as: INTEGRITY CONTINGENCY SECURITY CONTROLS Accidental/deliberate Data Systems Unscheduled threats Data will maintain its integrity if interruptions that complete and not corrupted. Input, require disaster processing and output must all be recovery plans controlled, including the use of back ups and archives, and creation of passwords

10: Identifying and preventing fraud Topic List This chapter considers the various types of fraud, its prevention and detection. The consequences of fraud can What is fraud? be very serious for both the organisation and its Potential for fraud direction. Implications of fraud Systems for detecting and preventing fraud Responsibility for detecting and preventing fraud Money laundering

What is Potential Implications Systems for detecting Responsibility for detecting Money fraud? for fraud of fraud and preventing fraud and preventing fraud laundering Fraud Intentional misrepresentation of the financial position Deprivation by deceit or Overvaluation of inventory There are two main categories: Fictitious sales Removal of funds or assets from Manipulation of year end events a business Understating expenses Theft of cash Manipulation of depreciation figures Theft of inventory Payroll fraud Teeming and lading Fictitious customers Collusion with customers Bogus supply of goods Paying for goods not received Manipulation of cash book Misuse of assets

What is Potential Implications Systems for detecting Responsibility for detecting Money fraud? for fraud of fraud and preventing fraud and preventing fraud laundering Prerequisites: High fraud risk: Dishonesty Motivation Lack of integrity Unusual Factors crop up time and Opportunity transactions time again as potential Excessive pressures fraud situations These pre-conditions Lack of audit must exist in order to Poor control evidence systems make fraud a possibility. External factors Internal factors Page 85 General environment New personnel Industry features New systems Technology New operations Economic changes Restructuring 10: Identifying and preventing fraud

What is Potential Implications Systems for detecting Responsibility for detecting Money fraud? for fraud of fraud and preventing fraud and preventing fraud laundering Profits deviating from Turnover increasing Secretive Expensive Long industry norms rapidly behaviour lifestyle hours Business Personnel Autocratic risks risks style Market Complex group Large Low Lack of segregation opinion structure organisation morale of duties Computer fraud The computer is frequently the vehicle through which fraud is carried out. Lack of Computer Risk User-friendly and training hackers awareness flexible systems

What is Potential Implications Systems for detecting Responsibility for detecting Money fraud? for fraud of fraud and preventing fraud and preventing fraud laundering The precise ways in which the firm is affected depends on the type of fr aud being carried out. Removal of funds Profits are lower Intentional Artificially enhanced: or assets Business has fewer misrepresentation assets Distributions too high Net asset position Retained profits low weakened Shortfalls in working capital Returns to Incorrect decisions shareholders fall Stakeholders misled Results understated: Reduced working Returns may be reduced capital Share price falls Cannot operate Loan finance restricted effectively Negative publicity Company collapses Legal consequences in serious cases Page 87 10: Identifying and preventing fraud

What is Potential Implications Systems for detecting Responsibility for detecting Money fraud? for fraud of fraud and preventing fraud and preventing fraud laundering Managing the risk of fraud is a key part of managing business risks in general. There must be a willingness to enforce controls. General prevention 1 Managers and staff need to be aware of their responsibilities. There policies may even be a fraud officer. Emphasising ethics 2 Fraud detection is helped by having information readily available, Recruitment procedures and encouraging employees to report any suspicions – Personnel controls 'whistleblowing' Training and awareness Segregation of duties 3 Internal audit staff must ensure that systems and controls are Appropriate thoroughly reviewed. External audit staff must assess the risk of documentation fraud having a material impact. Limitation controls 4 Investigation procedures include establishing the extent of the Physical security loss, how it occurred, who was implicated and the role of the Authorisation policies control system. Standard procedures Computer security

What is Potential Implications Systems for detecting Responsibility for detecting Money fraud? for fraud of fraud and preventing fraud and preventing fraud laundering It is the responsibility of the directors to take such steps as are reasonable to prevent and detect fraud. Directors External auditors Ensure that: Express an opinion as to tr ue and fair view Assets are safeguarded Design procedures so as to have a reasonable Activities are honest expectation of detecting fraud Financial information is reliable Document findings and report to management Arrange for reporting to an appropriate authority Also: if serious enough Deter fraudulent conduct Qualify audit report if necessary Detect any that occurs Page 89 10: Identifying and preventing fraud

What is Potential Implications Systems for detecting Responsibility for detecting Money fraud? for fraud of fraud and preventing fraud and preventing fraud laundering The rules on money laundering in the UK are Money laundering found mainly in the FSA SYSC Handbook. Similar regulations exist in other juristictions. The term given to attempts to make the proceeds of Accountants and other professionals have a crime appear respectable. There are five main offences: duty to report money laundering. Failure in relation to that duty is a criminal off ence Acquisition, possession or use of such proceeds which may result in a prison term of up to Assisting another to retain such proceeds five years. Concealing such proceeds Failure to report knowledge/suspicion of ML Tipping off (warning a suspected launderer) There are three phases in the process of mone y laundering: Placement – the actual disposal of the proceeds of initial illegal activity Laundering Layering – the transfer of monies to conceal the or iginal source Integration – having been layered, the money has the appearance of legitimate funds Companies need to take action to be aware of anti-money laundering regulations.

Vienna Convention 1988 Financial ActionTask Force (FATF) This was the first international agreement to FATF is a inter-government body made up of over stop the international effects of money 30 member states and international organisations. It laundering. Nations agreed to make it illegal. aims to: Key issues Develop and promote policies to combat ML Mutual assistance Prevent proceeds being used in future cr iminal Extradition activity FATF has developed 40 recommendations, the first The nature of money laundering makes it ideal of which is that all countr ies should take steps to to carry out internationally, transferring money ratify and implement the Vienna Convention. between countries. This can make it difficult to The Council of Europe also makes police. It is also why it is important that it is recommendations re ML which are similar to FATFs. illegal in as many countries as possible. The International Monetary Fund recommends the FATF standards and promotes itself as a f orum for Page 91 sharing information. 10: Identifying and preventing fraud

Notes

11: Leading and managing people Topic List This chapter attempts an overview of the manager's task, and traces the development of management theory away The purpose and process of from universal principles towards contingency management approaches and a focus on areas such as leadership Writers on management and other skills. Management and supervision What is leadership? Leadership skills and styles

The purpose and Writers on Management What is Leadership process of management management and supervision leadership? skills and styles Management Key roles Work planning 'Getting things done through other people' Resource allocation 1 Set objectives Prioritising 2 Monitor progress and results Projects and project management 3 Communicate corporate values 4 Stewardship 5 Looking after stakeholders via: Physical power Resource power Authority: the 'right' to do something Position power Accountability: accountability for actions Expert power Responsibility: obligation to perform Referent power Delegation: giving subordinate authority Negative power Power: the ability to do something

Project management Role of the project manager A project is: 'an undertaking that has a beginning Outline planning: strategy, procedures, targets and an end and is carried out to meet established Detailed planning: identifying tasks, resources goals within cost, schedule and quality requirements; network analysis for scheduling objectives'. (Haynes) Team-building: establishing project identity – multi-functional (or multi-organisational) if required Note: Not a continuous, ongoing activity Communication: briefing team members, feeding But: Team management has many of back on progress, reporting, leading meetings these aspects Co-ordination: integrating schedules and work flows Examples Monitoring and control: identifying and correcting departures from plan A construction project (planning → completion) Problem solving: interpersonal, task, Design/development of a new IT system contingency Installation of new equipment Quality control: juggling time/cost and quality Launch of a new product targets Deliver consultancy report to a client 11: Leading and managing people Page 95