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227 Cards in this Set
- Front
- Back
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define Management
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Planning
Organizing Leading Controling of human + other resources to achieve org. goals efficently + effectively |
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define efficiency
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resources used to achieve goals
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define effectively
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IDing goals + how close you get to achieving them
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2 management theories
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Scientific management
administrative management |
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define sci. management
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relationship btwn ppl + tasks to increase EFFICIENCY
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admin management
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organization structure that leads to efficency + effectiveness
-created bureaucracy |
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who created scientific mang.
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Taylor, first to apply scientific principles to management
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who created admin. thought
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Fayol
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Both agreed upon?
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that all organizations, small or big, have to preform a task or function to operate efficently
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View of management before industrial rev?
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tasks were to perform basics-like get food
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what formed bureaucracies?
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adminastrative managment theory
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define bureaucracy
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formal system of organ. and admin. to ensure efficiency + effectiveness
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5 principles of bureaucratic system
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1)authority is from position
2)you got posit. cuz of performance, not cuz social standing or contacts 3)position authorities + tasks need to be stated 4)auth. is best when heirachies in place 5)need defined rules (SOP) to control behavior |
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what is SOP
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standard operatin procedures
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Fayols 5 Management Function
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1)Forecast-ID goals
2)Organize 3)Command 4)Coordinate 5)Control(Evaluate) |
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Fayols 14 principles
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1)Specialization of labor
2)authority(un?ed) 3)Discipline 4)Unity of Command-1boss 5)unity of direction 6)subordination of indiv. intrests 7)Remuneration-fair wages 8)Centralization 9)line of authority-chain of command 10)Order 11)Equity-treated fair 12)personnel tenure-for good performance 13)Initiative 14)Esprit de Corps-body of cooperation |
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What are 4 of Fayols 5 principles, that are used in todays management
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planning
organizing leading controling |
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in 4 principles used today of fayols 5;
where does reviewing progess and measuring effectivness fall under? |
4)control
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in 4 principles used today of fayols 5;
where does developing departments fall under |
2)organizing
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in 4 principles used today of fayols 5; where does establing a vision and mission fall under?
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3)Leading
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what resources do managers manage?
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Human + Capital
both are scarce(limited supply) |
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define self management
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assigned or self assigned
personal assigning levels of importance |
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define interpersonal mangement
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a manager and ONE person
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organizational management
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involves actions affecting GROUPS of ppl
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todays manager need to...
4 things? |
eecs
1)energize 2)empower 3)communicate 4)support |
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define leadership
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vision based-moving ppl towards the SHARED goal
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T or F a leader inspires
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True
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define management
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handling problems in running organization
-implement the plans |
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T or F
A manager is NOT always a leader |
true, but they can be
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Manager should have what 3 skills?
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1)Conceptual skills
2)Human skills 3)Tech. skills |
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define conceptual skills
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analyze and diagnose
-finding the cause and effect |
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define human skills
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ability to understand, alter, lead, and control ppl's behavior
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define tech. skills
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job specific knowledge required to do task
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how do you enhance these 3 skills?
skills needed for managers |
formal training, reading, and practice
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Top managers are better at what skill?
line manager are better at what skill? |
top managers-conceptual
line managers-more tech. skills |
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1st level suppervisor supervises who?
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entry level employee
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middle level suppervisor supervises?
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1st level suppervisor
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chief executives suppervise who?
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middle level managers
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supervisory responsibilities
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assign tasks and evaluate employees functions
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Human resources manager
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personnel policies
-staffing employee training + development |
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Mintzberg Manager Roles
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1)Interpersonal-figurehead
2)informational-disseminates 3)decisional-entrapeneurer |
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authoritarian mang style
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ppl to be controlled
external motivattion is key |
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participative mang style
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ppl oriented, good at delegation, but fails to be directive
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Bureaucratic mang style
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rules oriented, not Risk takers
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Laissez Fiare
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hands off, things will work out, descion left to group
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what is the best management style
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NOT 1 is best, combo is best
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when is authoritative best
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emergencies, for inexperienced employees, hostile employess
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define entrepreneurship
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french word to do something
-indiv. who persue opportunities without regard to resources |
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characteristics of an entrepreneur
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high levels of achievement
INTERNAL locus of control -actions occur cuz oneself Calc. Risk taker |
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Types of Entrepeneurs
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Personal achievers
Expert Idea Generators Super Sales People Real Managers |
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define personal achievers
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need for feeback and achievement, strong commitment
internal locus of control |
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define expert idea generators
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build venture around new product
desire to innovate use intelligence as comp advantage |
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define real managers
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take charge, want to stand out, desire power, positive attitude towards authority
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characteristics of Intrapreneurship
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ability to be successful in corporate environment
-must work within existing corp hierachy |
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positives/negatives of intraprenurership
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-have existing support networks-coworkers
-Rely on exisiting resources -face career risk, NOT financial risk -corp can lend name + rep to new venture |
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Entreprenurial process
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1)Identify an opportunity
2)Develop concept 3)Determine required resources 4)Accquire necessary resources 5)Implement + manage 6)Harvest the venture |
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examples of an opportunity
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change in demographics
new market segment new technology regulatory changes social changes |
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characteristics of required resources
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skilled employees, financing, facilities
-licesnses, patents |
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what is a business plan
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a formal document of background info about opportunity + key participating members
-detailed info about endeavor |
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Benefits of business plan
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focus on goals + target market
-serves as selling tool -IDs SW and omissions |
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give examples of harvesting the venture
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selling it, family succession, liscensing the rights, going public, shutting down
-it's the exit strategy |
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define an asset
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what the business OWNS
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define liability
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what the business OWES
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reports are prepared to show.....
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resources
-assets -liabilities -owners equity income, expenses, sources and uses of cash |
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why prepare financial reports?
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external factors
-to show investors, lending instituitions internal factors -to guage perfromance -compare itself at diff times -compare pharm to standard and/or other pharms |
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define entity concept
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business and owner are SEPERATE entities
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define "going concern"
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assumption business doesn't have set date to close
-to keep it open |
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monetary concept
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financial statements only show what can be MEASURED in terms of money
-intangibles like good will have value but are NOT recorded |
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accounting period
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arbituary time periods , Fiscal period
-can start whenever, use it to compare years |
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equities =
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source of assets
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assets =
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equities
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T or F
the accouning equation states everything owned by a business is owned by a specific person in the company |
F
it says someone is, but who?? |
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also,(longer version)
equities = |
owners equity and liabilities
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law of accountants
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assets=owners equities + libailities
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T or F
assets are either owned by owner or by debt holder(liabilites) |
True
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define double entry
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NOT DP!!
transaction recorded as received or expended AND the source |
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cash basis
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sales + expenses recorded when CASH is recieved or paid out
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accrual basis
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focuses on when sales and expenses when they occur
NOT based on when cash is recieved |
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A/R and Cash would be a subheading of...
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assets
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A/P and notes payable would be a subheading of
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liabilities
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describe the flow of recording transactions
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general journal-> general ledger-->trial balance-->(Balance sheet + Income statement)
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diff between balance shee and income statement
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balance-generally more like snap shot of given time
statement-always changing |
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describe the general journal
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chronlogically lists the transactions
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general ledger
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post the journal entry to a specific ledger
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subsidary ledger
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a breakdown of ledgers into transaction for each supplier
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what happens to assets when rev is made
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assets increase
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what happens to assets when expenses are incurred
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assets decrease
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assets =
(long long equation) |
liabilities +Owners Equity +Revenue-Expenses
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define trial balance
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the summerization and adjusting of accounting info
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in the trial balance, what is balanced and why
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why-to show reliability
what-debits(expenses + assets credits(liabilities + revenue+owners equity) |
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3examples of financial statements
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balance sheet-static
income statement-changing statement of retained earnings-are you putting it back in? |
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if you need a loan what statement would you look at?
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balance sheet
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balance sheet
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summerizes assets and liabilities and what is left over(net worth)
-shows pharmacys solvency |
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define solvency
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the ability to pay back its debt over the long-term
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define laquity
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ability to pay back in the short term
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examples of net worth
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capitol, retained earnings
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income statement
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summerizes sales and expenses over time
-shows pharmacys profitability |
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define profitability
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ability to make sales to cover all expenses and still make a ROI(profit)
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define gross margin
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total sales-COGS
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Vertical analysis
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comparing data as a %change from BASE(STANDARD)
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Horizontal Analysis
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evaluating data over a period of time
-comparing to self |
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what does profitability ask
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do sales prices exceed unit costs
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what does productivity ask
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are employees productive,-sales per employee, sales per hour, sales per square foot
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how do we improve bottom line
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increase profits or decrease costs(or combo)
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how to increase pforits
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increase profit margin
increase volume(increase #of units per time w/o changing price) |
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how do we decrease costs
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decrease COGS
decrease operational costs(lighting, answer phones at certain times) |
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increase in volume, does what to profits
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increase profits
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calc the gross margin
%gross margin |
sles-COGS
sales-COGS/sales x100 normally 19-24% |
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whats formula to calc selling price using gross margin
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SP=COST/(1-GM)
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how to calc profit margin
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net income/net sales revenue
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what does net profit margin show?
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show relationship btwn sales and profit AFTER taxes
-usually 2% -indicator of pricing policies and ability to control costs |
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Return on Assets
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indicator of profitability relative to total assets
#tells us how much money they make from each dollar of assets |
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how to calc ROA
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Net Income/Total assets
strive for an ROA of at least 15% |
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What is ROE
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return on equity or ROI(investment)
=net income/common equity |
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what is a sign that managers are efficent users of reinvested earnings to gen addtl earnings
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ROE
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Efficiency Ratio
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expenses/Revenue
how much you spend to make one dollar |
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to determine solvency look at
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TOTAL ASSETS
and TOTAL liabilities |
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look at what to determine liquidity
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current assets
current liabilities |
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which ratio is good to dermine liquidity
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current ratio-good to determine 12months
2:1 is considered good but>5 isnt good cause not using effective use of assets |
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how to calc current ratio?
what does it mean? |
current assets/current liabilities
for every dollar company owes it has x amt available |
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quick ratio
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=Current assets-inventory/current liabilities
>1 is acceptable -it measures ability to quickly cover current liabilities |
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higher Quick and Cash ratios means
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its more liquid....but not always better
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cash ratio
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quickly liquidate assets to cover short term liabilites
cash+cash equiv(CC's)/current liabilities |
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debt to toal assets ratio
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measurement of solvency
totl liabilites/totl assets |
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debt to equity ratio
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debt(liabilities)/equities(net worth)
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asset turnover ratio
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asset turnover=net sales/avg total sales
measures how efficently a company is using its assets |
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inventory turnover
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COGS/Avg inventory
standard is 6.1 |
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recievable turnover
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net credit sales/avg net recievables
net credit sales=net sales-cash sales |
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a high recievable turnover implies?
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company operates on cash basis or its collecction of accounts recievable is efficient
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what is average collection period, ACP?
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average # of days for the period in between the sale and getting that money
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how to calc ACP?
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ACP= recievables/ avg sales per day
or reciv/ (sales/365) |
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all turnover ratios imply
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how effectively u use assets to make sales (larger, the better)
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qualitative factors when evaluating companys future
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revenues ties to 1 customer?
% of business is overseas? competition regulatory environment |
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what are underlying basis of all business decisions
(4) |
production
inventory personnel facilities |
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7 steps in forecasting
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1)determine use
2)select item 3)determine time horizon 4)choose model 5)gather data 6)make forecast 7)validate and implement results |
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quantitative fore casts are made thru?
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numbers
-mathematical models -time series models |
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qualitative forecasts use?
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decision makers intuition
emotions personal experiences |
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quantitative models
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naiive approach
moving averages exponential smoothing trend projection linear regression |
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naive approach
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mondays sales will be the same as next mondays and the following mondays
-most cost effective, gives starting point |
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non-niave quantitave models can be broken down intwo 2 groups
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time series models-moving averages, exponential, trend projection
associative models-linear regression |
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times series models
4 components |
Trend-gradual movement of data
Seasonality-pattern that repeats after period of time cycles-patterns occur every several years random variations-data blips occur cuz chance or unusual situation |
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moving average
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sum of all data periods/n
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weighted moving average
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places more emphasis on recent values
(weight)*(script volume) add them all up/ sum of all weights |
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exponential smoothing
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weighted moving average forecast technique with data points being eweighted by exponential function(smoothing constant)
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exponential smoothing takes into account?
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variance between actual and forecasted
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trend projections
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fits trend line to historical data then projects line into future
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linear regression
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associative forecasting model
-straight line model to describe independent and dependent variables |
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master budgets
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sales budgets, operational budgets, budgeted financial statements
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static budgets
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do not vary with volume, made for one level of activity
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flexible budgets
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adjusts for changes in volume
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pharmacy manager budgeting level of responsibility
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forecast up to 1 year
limited operating budget |
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director/ distric managers level of responsibility
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forecast 1 to 3 years
total operating budget |
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owner/operator/CEO budget responsibility
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forecast 3 to 10 years
master budget |
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operating budget
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rx sales, scripts, rx cust. count, pharm and tech hours
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flexible budget hours
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(actual-budgeted)/SPMH
SPMH=scripts per man hour |
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what is pharmacys largest current asset
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inventory
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define financial perspective
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decrease COGS, increase Gross margin and net profit
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what is the operational perspective
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having enough supply to meet demand
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purchasing objectives
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right product,
right product mix right quantity + time rightprice right vendor |
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examples of right product
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target market-if elderly,kids use liquid meds
pharmacy image-only narcs? |
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right product mix
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defined by products a pharmacy provides
full service pharm-DME, compounding retail pharm-step down full service minus DME or compounding apothecary-dispensing only/or limited front store |
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types of inventory
-cycle |
reg. inventory to dispense
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types of inventory
-buffer |
(safety)-additional inventory to protect from increased demand
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types of inventory
anticipatory |
(speculative)-inventory kept for anticipated future demand or manufacturer price increase
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what is the 80/20 rule
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80% of sales comes from 20%of inventory
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right quantity
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average demand
review time lead time buffer stock re-order formula |
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average demand
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rate of sales in units(mls, tabs)
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review time
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peroid inbetween stock checks
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lead time
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time it takes to get product after ordering
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reorder formula
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(review time+ leadtime)x
(avg demand + buffer) |
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Economic order quantity
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determines how much to order in most economincal way
-keeps most efficient "quanity on hand" maintained |
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right price
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discounts
-cash discounts 2/10-means 2%discount if within 10 days |
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direct from manu.
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type of right vendor
-gives special buys -they do "drop ships" |
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whats a drop ship
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an order thru manufacurer but billed thru primary vendor
-costs more |
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define inventory management
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practice of planning, organizing, and controlling, inventory to make profits
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what is the goal of inventory management
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to balance inventory
-minimize investment while balancing supply/demand |
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costs associated with having inventory
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acquisition costs-price for product
procurement costs-costs associated with getting product(checking stock, placing order) carrying costs-costs for storing, handling, insurance, theft(can be quantified precisely) stock-out costs-cost of not having product(hard to quantify) |
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evaluating inventory management
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use inventory turnover rate
(ITOR) or Net profit/avg inventory |
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ITOR equation
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=COGS/avg inventory
avg inventory=begining+end inventory/2 |
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ITOR if you don't have COGS, what to do
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use actual sales fori nventory period/actual inventory
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ITOR values
was good? is good? means oos |
was good-7.5
is good-7.5-10 means a lot of O.O.S. >10 |
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net profit/avg inventory
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indicates if inventory is used effieciently
-want #'s >20% |
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inventory mang methods
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visual-look at #'s on shelf-compare to what should be on hand
periodic-count #'s at predetermined intervals perpetual-monitored inventory@all times(computers) |
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which is the most effiencet method of checking inventory
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perpetual
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pharmacies should conduct a physical inventory..how often?
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at least annually
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shrink ranges
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.7-4.5 % of SALES
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Role of technology
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ordering-web based allows realtime stock checks
sales-purchase reports POS systems-how much was sold(which items) |
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pharmacy marketing
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-often overlooked
-critical of success when going from product to pt focused |
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MAIN 4Ps
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Product-organizations offerings(can be services)
price-cost(dumb) place-where its bought |
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5th P
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positioning-how to persuade pt to buy product
-"branding" |
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def expectations
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internal standards customers use to evaluate service
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def satisfaction + quality
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cust. compares actual response to expectations
-quality is different and hard to reach 100% |
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value
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preception btwn preceived benfits and costs
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loyalty
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consumers decision to return time and time again
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How to collect customer data
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post-trans. survery-register receipts
overall eval. survey-email/phone mystery shopper focus groups-pay ppl employee data-biased |
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define relationship marketing
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activities aimed for longterm
-cost effective links btwn organization and customer for mutual benefit |
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relationship marketing
-easy or hard to implement? -whos driving force? |
very easy to implement in healthcare
-pharmacists and techs are driving force |
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relationship characteristics
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requires pt centered focus
ID cust. as partners both parties participate + take responsibility |
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service relationships
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make realistic promises
let employees deliver on promises each contact is moment of truth-1 neg exp can sever relationship |
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additional 4P's
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process management-putting it together(goals+services)
personnel-whos doin service physical facility-layout changes to appease pts productivity-# of pts served daily needs to be monitored |
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advertising
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most expensive
-TV, radio, newspaper, internet adv. -we control message-communitcate it clearly |
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sales promotion
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less expensive
-includes samples, coupons, BOGO -in store flyers, loyalty cards |
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publicity
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nonpersonal info about product of organiz.
-not paid for by organiz. -can be - or +, can't control but can influence -MORE CREDIBLE than advertising |
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personal selling
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interpersonal comm about good or service
-pharm + pt dialogue -"up-selling"-reccommending product during convo ex-adding cough syrup for URI |
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types of planning
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strategic
operational business resource organizational contingency |
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define planning
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efforts taken by organization to max future success
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limits to planning
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its guesswork
-only as good as data -planning with out implement=FAIL -without adapations=FAIL |
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steps in planning process
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1)define plan to a purpose(vision or misson)
2)asses situation 3)get goals 4)strategies to get goals 5)establish objectives for goal 6)define timelines + responsibilities for objective 7)write/comm plan 8)monitor progess |
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define vision
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what the organization wants to be in future at some point
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mission
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purpose of the company
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process of strategic planning
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1)preplan-ID objectives, how much time to give
2)planning-SWOT,goals + strategies developed 3)post-planning-comm plan/implement/monitor |
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barriers to planning
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not giving sufficient time to planning
-power struggles/politics -not planning far enough ahead -not implementing/communicating effectively |
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strategy formulation
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form goal->develop strategy->implement->reassess
1.segment market 2.select target 3.position product |
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characteristics of strategic planning
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long term5-20years-provides framework for more detailed planning
-viewpoint is external-how organization interacts with environment |
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operational planning characteristics
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short term 1-5 years
viewpoint is internal -day to day tasks |
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business planning characteristics
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short term 1-5years
used to start a new business,expand, or terminate |
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resource planning charcteristics
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midterm 1-10years
-viewpoint is internal-specific to resources defined in plan |
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organizational planning charcteristics
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midterm 1-10 years
internal viewpoint -scope specific to structual-relationships, divisions, responsibilities |
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contingency planning charcteristics
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short to long term 1-20years
-specific to a situation viewpoint is external and internal -labor strike, disasters |
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companys vision statement is ment for
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employees
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companys mission statement is ment for
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customers and employees
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what is situational analysis
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identifyin where, what and how the orgnaization is in the present
-consider past performance and current situation |
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common method of conducting situation analysis
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using SWOT analysis
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companys vision statement is ment for
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employees
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companys mission statement is ment for
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customers and employees
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what is situational analysis
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identifyin where, what and how the orgnaization is in the present
-consider past performance and current situation |
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common method of conducting situation analysis
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using SWOT analysis
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