Management and Accounting Fundamentals

Flashcards covering introductory management concepts, organizational culture, strategy, international contexts, and core financial accounting and reporting principles.

What is Quinn's Competing Values Framework model shown in the diagram?

It is a framework with two axes—Flexibility vs. Control and Internal vs. External focus—that outlines four organizational models: Human relations, Open systems, Internal process, and Rational goal.

What does the subsystems diagram of an organization's internal environment illustrate?

It shows the input and output flow of materials, energy, and information through interconnected subsystems: People, Structure, Business processes, Finance, Management, Objectives, Technology, Power, and Culture.

How is management defined in terms of human activity and organizational role?

Management is defined as both a universal human activity (taking responsibility for an activity to create value) and a distinct role.

How do entrepreneurs, social entrepreneurs, and managers differ in their core functions?

Entrepreneurs identify market opportunities and mobilize resources profitably; social entrepreneurs provide goods/services to disadvantaged groups; managers organize and execute business in line with the entrepreneur's ideas.

What are the three components of the Triple Bottom Line?

Profit (economic account, measured by profitability and return on assets), People (social account, measured by impact on quality of life), and Planet (environmental account, measured by environmental impact).

What are the four core tasks of managing?

1. Planning (setting direction, forecasting, allocating resources); 2. Organising (creating structure and policies); 3. Acting/Leading (influencing others); 4. Controlling (monitoring progress and taking corrective action).

What are the three overarching categories of Mintzberg's 10 managerial roles?

Interpersonal (Figurehead, Leader, Liaison), Informational (Monitor, Disseminator, Spokesperson), and Decisional (Entrepreneur, Disturbance handler, Resource allocator, Negotiator).

What are Edgar Schein's three components of organizational culture?

Artifacts (visible features), Espoused values, and Underlying assumptions (deeply held ideas).

What are Charles Handy's four types of organizational culture?

Power culture (central figure), Role culture (procedures/hierarchy), Task culture (focus on completion), and Person culture (serving the individual).

What are the elements of Porter's Five Forces model?

Intensity of rivalry, Threat of new entrants, Bargaining power of buyers, Bargaining power of suppliers, and Threat of substitutes.

What factors are analyzed in a PESTEL Analysis?

Political, Economic, Socio-cultural, Technological, Environmental, and Legal external factors.

What is the distinction between High-context and Low-context socio-cultural environments?

High-context environments rely heavily on shared experience (e.g., Japan), whereas Low-context environments rely on explicit communication (e.g., USA).

What are Carroll's Four Corporate Responsibilities?

Economic (make a profit), Legal (obey the law), Societal (do what is right/ethics), and Philanthropic (contribute to community).

How is greenwashing defined in corporate responsibility?

Greenwashing is the risk of divergence between "talk" (disclosure) and "walk" (actual practice).

What is the distinction between programmed and non-programmed decisions?

Programmed decisions are familiar, structured, and resolved by rules; non-programmed decisions are unique, ambiguous, and require judgment.

What are Porter's generic competitive strategies based on scope and competitive advantage?

Cost Leadership, Differentiation, Cost Focus, and Differentiation Focus.

What is the difference between Mechanistic and Organic organizational structures?

Mechanistic structures have specialized tasks, hierarchy, and vertical communication (suitable for stable environments); Organic structures have shared experience, network structure, and horizontal communication (suitable for unstable environments).

What is Lewin's Force-Field Analysis?

A model for managing change that compares Driving forces (seeking change) against Restraining forces (opposing change).

What four perspectives make up the Balanced Scorecard?

Financial perspective, Customer perspective, Internal perspective, and Innovation and learning perspective.

How is accounting defined?

Accounting is the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character, and interpreting the results thereof.

What basic accounting relationship is illustrated in the structural diagram of a Balance Sheet?

It shows that total Assets (Current and Non-current) must balance with total Equity and Liabilities (Non-current and Current liabilities).

What three financial dimensions are represented in accounting to show impact on a company?

Profitability (capability to generate value), Solvency (capability to pay debts timely), and Equity (amount of shareholders' resources).

How do internal and external stakeholders differ regarding financial statements and decision-making?

Internal stakeholders (managers) use accounting information for decision-making and resource management, while external stakeholders (investors, lenders, suppliers, customers, governments, public) are interested in the business but cannot manage the process.

What three statements compose the Annual Financial Statement?

1. Balance Sheet (statement of financial position); 2. Income Statement (profit and loss statement); 3. Statement of Cash Flow.

What is the basic equation for the Balance Sheet?

$$\text{Assets} = \text{Liabilities} + \text{Equity}$$

What is the formula for calculating Profit/Loss (Net Income) on the Income Statement?

$$\text{Net Income} = \text{Total Income} - \text{Total Expenses}$$

What is the difference between Accrual Accounting and Cash Accounting?

Accrual Accounting records revenues and costs when they mature (regardless of cash movement), whereas Cash Accounting records revenues and costs only when cash is moved.

What are the fundamental rules of double-entry bookkeeping regarding debits and credits?

Every transaction has at least two effects where $\text{Total Debits} = \text{Total Credits}$. Assets, Expenses, and Costs increase in Debit (DARE) and decrease in Credit (AVERE), while Liabilities, Equity, and Income decrease in Debit and increase in Credit.

What is the formula for Cost of Goods Sold (COGS)?

$$\text{COGS} = \text{Initial Inventory} + \text{Purchases} - \text{Final Inventory}$$

What are the formulas for Straight-Line Annual Depreciation and Net Book Value?

$\text{Annual Depreciation} = \frac{\text{Cost}}{\text{Useful Life}}$ and $\text{Net Book Value} = \text{Historical Cost} - \text{Accumulated Depreciation}$

What three categories of inventory are recognized under IAS 2?

1. Finished goods (merci finite); 2. Work-in-progress (in produzione); 3. Raw materials (materie prime).

Which inventory valuation method is explicitly prohibited by IAS 2?

IAS 2 prohibits the LIFO (Last-In, First-Out) method because during inflation it gives obsolete inventory values.

How are accounting standards assigned to different types of entities in Italy according to the framework diagram?

Large companies, listed companies, banks, financial institutions, and insurance companies must use IAS/IFRS, while SMEs and other companies use OIC (with an option for IAS/IFRS).

What is the formula for Net Realizable Value (NRV) under IAS 2?

$$\text{NRV} = \text{Estimated Selling Price} - \text{Costs of Completion and Sale}$$

What are the three criteria required to recognize an Asset in financial reporting?

1. Past event; 2. Present control (does not require legal ownership); 3. Expected future economic benefits.

What is the formula for calculating Goodwill upon acquisition?

$$\text{Goodwill} = \text{Price Paid} - \text{Fair Value of Net Assets Acquired}$$

How is Recoverable Amount determined during an Impairment Test?

$$\text{Recoverable Amount} = \max(\text{Value in Use}, \text{Net Selling Price})$$

What are the three main sections of the Statement of Cash Flows?

1. Operating activities (gestione corrente); 2. Investing activities (acquisition/sale of assets); 3. Financing activities (debt, equity, dividends).