Diploma in Management & Leadership Level 5

Week- 5Resource Management

By Anjum Sattar

Email anjumsattar@yahoo.com

11/1

0/20

11

Water Only

Aims and Objectives. Aim (s) Recap of previous lesson• Relevant organisational objectives and legal requirements and your responsibilities (relating to non-financial resources)• the importance of sound financial management and budgetary control

commonly used financial terminology (e.g. income/ expenditure; cost/profit centre)

• the differing ways in which organisations manage their finances, sources of funding available to organisations

• the financial interdependency of the different parts of an• organisation• how budgets are built and expenditure managed, and your role in that process.

Learner will be able to…. • Define budgetary control• Identify sources of finance

11/1

0/20

11

Recap activity.

Activity for recap

Negotiating with suppliers

• As discussed negotiating with suppliers. Close working relationships are important, as are clear lines of communication. It is also essential that there are precise agreements between you and the supplier that lay out what you expect and what penalties can be exacted should these

expectations not be met.Formal contracts should lay out the following: requirementsdelivery dates quality standardssystems for returns schedules for payment.

Solving supplier problems

• If communication between you and your suppliers breaks down, then the relationship between you and your external customers will be affected. It is therefore in everybody’s interest to try to anticipate supply problems before they arise. Should these problems prove unavoidable, you need to develop ways in which both you and the supplier can work together to remedy them.

The budgeting process in practice

• Most organisations have a formalised process they go through toprepare budgets, such as the following.1. A financial strategy is set that includes financial objectives.2. Managers are asked to forecast their income and expenditureneeds within the parameters set by the overall financial objectives.3. All the forecasts are reviewed, and adjusted if necessary tomake sure that the financial objectives of the organisation can be met. Senior management then assembles all the information and prepares a ‘master budget’ for the whole organisation.• 4. Individual budgets are finalised and given to managers.

Budgetary control

• Budget

Sales / Income budget

Sales Budget

Break Time ! • 20 Min Break time allowed … Back in Class @

11/1

0/20

11

Components of DSS

• Model Management systems – Stores and accesses models that managers use to make decisions e.g. manufacturing facility,analysing financial status, forecasting demand for product or service, determining quality of products.

• Expert knowledge –Expert systems (Artificial Neural Network –knowledge based)

• Support tools -Online help, pull-down menus,user interfaces, graphical analyses, error-correction mechanisms – facilitates user’s interactions with the system. Interfaces –important support tools

-

Retrieve information

elements

Analyze entire files

Prepare reports

from multiple

files

Estimate decision

consequen-ces

Propose decisions

Degree of problem solving support

Degree of complexity of the problem-solving

system

Little Much

DSS Types

Make decisions

13-13

Three DSS Objectives1. Assist in solving semistructured problems2. Support, not replace, the manager3. Contribute to decision effectiveness, rather than efficiency

13-14

Functions of a DSS

• Model building –Decision makers identify input variables, interrelationsips amongst variables, problem assumptions and constraints

• E.g. sales forecasting- input variables such as demand, cost and profit, assumptions (e.g. prices of raw materials increase by 5% over forecasting period), identify constraints e.g. production capacity of plant. All information integrated within system

Functions of a DSS• What-if-analysis –Assess Impact of changes to model variables.

Used for semi-structured and unstructured problems. Develop(best-case scenario, worst-case scenario and realistic scenario)

-Spreadsheet packages such as Excel, Lotus 1-2-3

Functions of a DSS• Goal seeking –determining input values to achieve goals• Risk analysis-Assess risks. Decisions can be low-risk, medium-

risk and high-risk.• Graphical analysis-Visualize impacts of action, forecast

activities, detect trends- e.g. line or bar charts, grouped line or bar charts

Development of a DSS• SQL –relational database systems such as ORACLE,

ACCESS• 3 methods of developing a DSS-DSS generator- data management tools, spreadsheets,

report generators,statistical packages, graphical packages, model-building tools - Excel

-DSS shells – Program to build customized DSS e.g. financial software to forecast incomes,project cash flow, balance sheets, analyze financial data

-Custom made software- Use language such as C to develop procedures. Expensive and time-consuming

Organizational goals

Organizational effectiveness

Organizational efficiency

Decision-making effectiveness

Decision making efficiency

Quality of use

Attittude of DSS

Intelligence Quality

Information Quality

Process Quality

Organizational Measures

• Organizational effectiveness – greater growth, better innovation, increased profitability, technical excellence, return on investment

• Organizational Efficiency- Cost savings, increased productivity, greater team work, time savings

• Decision making effectiveness – Ability to carry out ad hoc analysis, examination of alternatives, rationality of process

Organizational Measures

• Decision making efficiency- reduction in time taken for decision making, improvements in predictive accuracy, greater focusing on key issues

• Attitude to DSS- enhanced employee welfare, satisfaction with procedures

• Quality use of DSS- Application in major problem area, repeat use, widespread use, utilization

• Information Quality- Accuracy, communication, timeliness

Organizational Measures• Intelligence Quality- Better understanding of organization,

generation of ideas• Process Quality-Confidence in decision,enhancement of

processes such as transparency, equal participation etc• Validity-Content validity

GDSS software

MathematicalModels

Other group members

Database

GDSSsoftware

Environment Individual problem solvers

Decision support system

Environment

Legend:Data Information Communication

A DSS Model

Reportwriting

software

13-23

11/1

0/20

11

• Assignment discussion

Summary . Q & A

11/1

0/20

11

Next Session.

In Next Session we are going to Learn ……

• Swot Analysis • PEST Analysis • How SWOT and PEST help in decision Making.

Wednesday 23/11/2011 10:00 – 13:00