Title | SBL- Learn signal Notes |
---|---|
Author | Elena Mihaila |
Course | Strategic Business Leadership (SBL) |
Institution | Association of Chartered Certified Accountants |
Pages | 105 |
File Size | 3.2 MB |
File Type | |
Total Downloads | 25 |
Total Views | 133 |
Notes...
SBL_-_3A_-__Qualities_of_Leadership
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SBL_-_3B_-_Leadership_and_Organisational_Culture
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SBL_3c_Professionalism__ethical_codes_and_the_public_interest_notes
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SBL_4a_Agency_notes
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SBL_4b_Stakeholder_analysis_and_social_responsibility_notes
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SBL_4d_Governance_scope_and_approaches_notes
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SBL_4c_Reporting_to_stakeholders_notes
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SBL_4f_Board_of_Directors_notes
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SBL_4e_Public_Sector_Governance_notes
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SBL_5A_Concepts_of_strategy_notes
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SBL_5B_Environmental_issues_notes
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SBL_5C_Competitive_forces_notes
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SBL_5D_Internal_resources_capabilities_competences_notes
41
SBL_5E_Strategic_choices_notes
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SBL_6A_Identification_assessment_measurement_risk_notes
47
SBL_6B_Managing_monitoring_mitigating_risk_notes
50
SBL_7A_Cloud_and_mobile_technology_notes
53
SBL_7B_Big_data_data_analytics_notes
56
SBL_7c_E-Business_Value_Chain_Notes
59
SBL_7D_systems_security_controls_notes
62
SBL_-_8A_-_Management_and_internal_control_systems_notes
65
SBL_8B_Audit_and_compliance_notes
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SBL_8C_Internal_control_and_management_reporting_notes
71
SBL_9A_Finance_function_notes
74
SBL_9B_Financial_analysis_decision_making_notes
77
SBL_9C_Cost_and_management_accounting_notes
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SBL_10A_Enabling_success_organising_talent_management_notes
84
SBL_10B_Disruptive_technologies_notes
87
Microsoft Word - APM Cloud Notes.docx
89
Microsoft Word - APM Cloud Notes.docx
92
Microsoft Word - Cryptocurrency and ICO notes.docx
95
SBL_10C_Performance_excellence_notes
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SBL_10D_Managing_strategic_change_notes
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SBL_10E_Innovation_and_change_management_notes
101
SBL_10F_Leading_and_managing_projects_notes
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SBL – Leadership Qualities of Leadership MANAGEMENT AND LEADERSHIP Management and leadership are not the same thing. Management involves getting things done through other people and is focused on action. It is about ‘doing things right’. Leadership means to create a vision that people can buy into by inspiring and motivating people. It is about ‘doing the right things’ Leaders inspire and influence people to achieve the objectives; managers take action (such as ensuring resources are available, ensuring action is producing results, and taking corrective action) to ensure the objectives are met.
INSPIRATIONAL VS TRANSACTIONAL LEADERS Different situations call for different types of leaders. An inspirational (charismatic/visionary/transformational) leader is particularly important in challenging times or periods of change. This type of leader uses motivation and support as their mechanisms of control. Transactional (instrumental) leaders are more suited to stable times. The mechanisms of control used by these leaders are supervision and structure, and reward and punishment. This type of leader performs a role which is similar to that of high level management.
SETTING THE TONE Leaders set the tone and culture of organisations. As such they have an ethical responsibility to be an example to others. They must behave and be seen to behave in an ethical manner and embody the values of the organisation. They must set this example if the rest of the organisation is to follow. SBL_-_3A_-__Qualities_of_Leadership
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FIVE APPROACHES TO LEADERSHIP (JUKL) 1. Trait approach: Suggests good leaders possess certain characteristic. However, research on this has been inconclusive and this approach has been mostly discredited 2. Behaviour approach: looks at how leaders cope with the demands and constraints of their job and how appropriate their reaction is on the resulting behaviours. 3. Power/influence approach: determines effectiveness of a leader by looking at how much power they have and how they exercise that power to help the organisation reach its goals 4. Situational/contingency approach: the skills, characteristics and behaviour required of a leader will be dependent on the situation 5. Integrative approach: combination of two or more of the above
STRATEGIC VS MIDDLE MANAGERS Strategic managers: -
Set the strategic direction of the organisation
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Create a vision
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Communicate the vision
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Motivate the workforce and ensure their personal objectives align with the vision
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Ensure resources are available
Middle managers: -
Implement the vision
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Lead their local teams to help the organisation meet its overall goals
ENTREPRENEURSHIP Entrepreneurs are people who are skilled at identifying and then exploiting opportunities by acquiring and directly resources effectively and creatively. This means that they are able to identify a need that is not currently met, and developing ways in which that need could be met.
INTRAPRENEURSHIP Intrapreneurship is the term used to describe environments in large organisations which allow entrepreneurial activity to be developed within that organisation.
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Organisations can achieve this by: -
Increasing autonomy
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Allowing employees to take flexible and varied approaches to their work
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Accepting a degree of failure to allow new ideas to be trialled
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Rewarding risk taking
This encourages innovation within the company which can be beneficial in allowing it to quickly respond to changes in the environment. Problems can arise however where there is disagreement or courses of action are taken which are in conflict with each other.
INTRAPRENEURSHIP EXAMPLE: DREAMWORKS ANIMATION Dreamworks Animation encourages intrapreneurship by offering free classes to their employees covering many aspects related to the business such as drawing, animation, script development and ideas pitching. The employees are actively encouraged to pick their ideas to the real executive team of the company who will not only listen to their ideas by will even put them into development if the required standards are met. Google and Facebook are other examples of well-known organisations that actively encourage intrapreneurship. Further information can be found online if you wish to see more examples of how this can be achieved in the real world.
EXAM FOCUS In the exam you may need to determine the appropriateness of the style of leadership that is currently in place and suggest ways in which this could be improved to better meet the needs of the organisation. Jukl’s perspectives can be a helpful tool in analysing the leader and leadership style currently in place. Knowledge of intrapreneurship, and how this can assist a company in its response to changing external environments, can help you to decide if the company could benefit from taking a looser approach in its management style.
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SBL – Leadership Leadership and Organisational Culture DEFINING CULTURE Culture is defined as “The way we do things around here”. The culture of an organisation reflects what it is like to work there and the values and principles that guide it. Culture and strategy are closely linked and one will often influence the other.
INFLUENCES ON CULTURE Organisational culture is influenced by a wide variety of factors: -
The country in which the organisation operates
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The priorities and values of the founding members
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The history of the organisation
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The attitude of the current leaders
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The structure of the organisation
THE CULTURAL WEB
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Paradigm: Assumptions, beliefs and priories of the organisation. It summarises and reinforces the rest of the cultural web. Control systems: Organisations are controls through numerous systems such as financial systems, quality systems, rewards and disciplinary procedures.
The priorities of the organisation can be demonstrated by
considering what areas are controlled closest. Routines and rituals: daily behaviour and actions that are considered „acceptable‟ as well as celebrations and other office gatherings. Symbols: logos, offices, dress codes, language and titles. Stories and myths: the people and past events talked about in an organisation often illustrate the values of the organisation and the behaviour it encourages Organisational structure: The way the organisation is physically structured, such as functions, departments and divisions. The organisational structure often reflects the power structure. Power structures: considers who holds the real power in the organisation. This often follows hierarchy, but there are exceptions. Talent, experience and expertise can also give significant power to others within an organisation
CHANGE MANAGEMENT Times of change present the greatest challenges for organisational leaders. A change management style will need to be adopted which reflects the specific circumstances in which the change is being made.
FIVE STYLES OF CHANGE MANAGEMENT (BALOGUN AND HOPE HAILEY) 1. Education and communication: explaining why change is needed 2. Collaboration and participation: involving employees in determining solutions. If done correctly, this should lead to an increased sense of ownership, with employees more likely to buy into the change 3. Intervention: bringing in a change agent from outside the company to lead the change process 4. Direction: Management impose the change on the workforce with no collaboration. While this approach can create employee resentment, it is sometime necessary if change is imposed on an organisation externally, for example by a regulator. 5. Coercison: Forcing change through threats. This approach is not recommended unless it is the only option in the circumstances. Usually a combination of two or more of these approaches will be adopted, and the most relevant approach may differ at various points in the change process.
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EXAM FOCUS In the exam you may need to apply the cultural web model to assess the culture in the organisation. Alternatively, you might use elements of it to back up assertions you otherwise make in relation to culture. You may need to determine which styles of change management would be best in the situation described in the case study.
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SBL – Leadership Professionalism, Ethical Codes and Public Interest
Ethics is involved with right and wrong. When faced with an ethical dilemma in the exam, application of ethical framework can help you form your conclusions.
TUCKERS 5 QUESTION APPROACH 1. Is it profitable? – if a course of action will not be profitable, it should not be pursued 2. Is it legal? – illegal actions should be dismissed immediately 3. Is it fair for all involved? – how will the various stakeholders be affected? Is it unfairly weighted towards one stakeholder? 4. Is it right? – is the course of action inherently right or wrong? 5. Is it sustainable? – does the course of action compromise the future?
ETHICAL FRAMEWORKS Can be either rules or principles based.
Rules based: specific set of rules that must be complied with.
Principles based: offer broad concepts that can be applied in all circumstances.
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ACCA’S ETHICAL FRAMEWORK All members and students of the ACCA are bound by this principles-based ethical code. Principle
Explanation
Integrity
Carrying out your work in an honest and straightforward manner
Objectivity
Acting without bias
Confidentiality
Unless there is a legal obligation, or disclosure is in the public interest, information that you have become aware of through the course of your work should not be disclosed to others.
Professional competence and due care
Only taking on work for which you are suitably qualified and experienced
Professional behaviour
Behaving professionally and courteously and not acting in such a manner that it brings the profession into disrepute. Acting in the public interest is also part of the professional behaviour required of accountants.
THREATS TO ETHICAL BEHAVIOUR Threat
Explanation
Safeguard
Advocacy
Supporting the position of a client, e.g. promoting a client that is about to float on the stock exchange, therefore potentially compromising future (real or perceived) objectivity.
Avoiding acting as an advocate of a client.
Self-review
Reviewing your own work, e.g. an internal auditor reviewing a system they helped to implement
Declaring the self-review threat and declining to undertake such work
Using different teams to carry out the work to preserve independence
Disclosure of any potential threats (register of interests) Selfinterest
Being in a position where you are personally impacted by decisions, for example being a major shareholder in a supplier to your business.
Intimidation
Being threatened, e.g. your manager threatening to dismiss you if you do not undertake action you know to be wrong. Auditors may be intimidated if they are threatened with not being reappointed if they do not issue an unqualified report
Familiarity
Being linked to a client organisation in some way that may compromise your objectivity, such as your brother being the finance director of a client you are auditing.
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Dispose source of threat (e.g. sell shares) Ensure you have no dealings with the party with whom you have an interest (not being involved in decisions relating to that supplier)
Whistleblowing process
Register of interests Ensuring the work is carried out by a different member of the team.
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THE PUBLIC INTEREST Accountants have a duty to act in the public interest. The IFAC definition of the public interest is the “collective wellbeing of community of people and institutions”. If an accountant becomes party to some information that it would be in the public interest for it to be known, it is appropriate for the professional ethic of confidentiality to be broken and this information disclosed. This should only be done following legal advice and/or guidance from the professional body.
FRAUD Fraud is a deliberate and dishonest action carried out to create an advantage for the perpetrator. In order for fraud to occur, three conditions must be in place: 1. Opportunity: The chance has to present itself, for example weak controls 2. Pressure: The perpetrator needs to be under some kind of pressure (eg financial pressure) to make them consider acting in a way they would otherwise not consider (ie illegally) 3. Rationalisation: The perpetrator will convince themselves that they are not doing anything wrong; they will justify it to themselves (eg they deserve it for treating me badly) In order to prevent/minimise fraud, action should be taken to reduce the chances of these conditions arising, such as establishing strong controls, screening new starters properly, and treating and paying staff fairly.
Organisations should clearly state in their fraud policy the action that will be taken against staff found to have committed fraud.
BRIBERY AND CORRUPTION Bribery: offering, or accepting, inducements to obtain inappropriate influence. Note that the person being bribed, is also guilty of bribery, not just the party offering the bribes. Corruption: carrying out business dishonestly and abusing power.
For the purposes of the exam, bribery and corruption are not acceptable. There are two elements to preventing/minimising bribery and corruption: 1. Culture and environment: ensuring the right people are employed within an organisation via robust recruitment and training, supported by a clear, well communicated code of conduct
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2. Establishing procedures such as whistleblowing and regular reviews of controls to help both prevent and detect fraud, bribery and corruption.
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SBL – Governance Agency
An agent is a party that acts of behalf of a principle. In business the shareholders (the principles) appoint directors (the agents) to work on their behalf.
THE AGENCY PROBLEM The agency problem involves ensuring that agents are acting in the best interests of the principles, rather than in their own best interests.
It arises as a result of two main factors: 1. Self-interest – the agenda and objectives of the directors are unlikely to perfectly align with those of the owners. 2. Information asymmetry – the directors know more about the company than the owners
MANAGING THE AGENCY PROBLEM There are two key approaches:
1. Governance – appointing non-executive directors to monitor the activities of the executive directors 2. Remuneration – this needs to be carefully considered to ensure the directors (agents) are working in the best interests of the shareholders (principal)
DIFFICULTIES WITH REMUNERATION Remunerating directors to ensure they work in the best interests of shareholders is difficult in practice. Consider these examples:
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1. Linking bonuses to current year profits – this can create short-termism as directors prioritise short-term profits at the expense of everything else. E.g. they may save money to boost short term profits by cutting training or not replacing staff but this will destroy long term value 2. Linking bonuses to share price – may encourage risk taking as directors will achieve huge bonuses if the risk pays off but will not lose anything if it does not.
EXAM FOCUS In the exam you may need to identify any problems with agency which may have arisen in the organisation and analyse the factors that have caused it to arise. Suggesting improvements for managing the situation may also be required.
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SBL – Governance Stakeholder Analysis and Social Responsibility
Stakeholders are any people or groups of people that have an interest in an organisation or are affected in some way by its actions. Active stakeholders, such as managers and employees are directly involved in the business, whereas passive stakeholders, such as customers or the general public are affected by its actions. Stakeholders that communicate directly with the organisation are direct stakeholders, whereas thos...