CIMA E1 flashcards

33 cards. Read the term and the definition here. The deck at the top of this page is optional.

Span of control

The number of subordinates directly reporting to one manager. Wide spans suit routine, standardised work and flatten structures; narrow spans suit complex work needing close supervision and coaching.

Scalar chain

The unbroken line of authority from the most senior level to the lowest, defining who reports to whom. Short chains speed communication; long chains slow it and can distort messages.

Functional structure

Grouping staff by specialism such as finance, marketing or operations. It builds expertise and economies of scale but can create departmental silos and slow cross-functional responsiveness.

Divisional structure

Grouping the organisation by product, customer or geography, each division holding responsibility for its own results. It sharpens accountability and local focus but may duplicate functions and lose synergies.

Matrix structure

Staff report to both a functional manager and a project or product manager. It combines specialist depth with project focus but creates dual authority, role conflict and slower decision-making.

Centralisation

Concentrating decision authority at senior levels. It gives consistency, control and scale economies in specialist expertise, but reduces local responsiveness and can demotivate managers denied discretion.

Decentralisation

Delegating decision authority to lower levels or local units. It improves speed and motivation and fits local conditions, but risks inconsistent decisions and weaker central control.

Mintzberg simple structure

A configuration with little formalisation, direct supervision by the owner-manager and a small strategic apex. It suits small or young firms and adapts quickly but depends heavily on one person.

Machine bureaucracy

Mintzberg configuration coordinating through standardisation of work, with formal rules, specialised tasks and a large technostructure. Efficient for stable, repetitive environments but poor at handling change.

Professional bureaucracy

Mintzberg configuration where coordination rests on standardised skills of professionals, giving them autonomy within an administrative support structure. Common in hospitals, law and audit firms.

Handy role culture

A culture built on rules, procedures and defined job descriptions, typically in bureaucracies. Predictable and fair but slow to adapt and prone to position-based rather than expertise-based authority.

Handy task culture

A project and team-based culture where influence comes from expertise and problem-solving. Flexible and innovative, but can fragment resources and blur accountability across overlapping teams.

Finance business partnering

Finance staff working alongside operational managers to interpret data, challenge plans and support decisions. It shifts effort from transaction processing toward analysis, insight and forward-looking advice.

Shared service centre

A single internal unit delivering transactional processes such as payroll or accounts payable to the whole organisation. It standardises process and cuts cost through scale and consolidation.

Stewardship role of finance

Safeguarding assets and ensuring accurate records and compliance through controls, reconciliations and reporting. It underpins reliability of all other finance activities and supports good governance.

Non-executive director

A board member without executive management duties who provides independent challenge and scrutiny of strategy and performance. Independence supports objective oversight and reduces executive dominance.

Audit committee

A board committee, normally of independent non-executive directors, overseeing financial reporting, internal control and the external audit relationship. It strengthens reliability of reported information.

Mendelow stakeholder grid

A matrix plotting stakeholder power against interest to set engagement strategy: key players engaged closely, high-power low-interest kept satisfied, low-power high-interest kept informed.

Porter five forces

A framework assessing industry attractiveness through rivalry, new entrants, substitutes, buyer power and supplier power. Strong forces compress margins and reduce the industry's profit potential.

Cost leadership strategy

Porter generic strategy competing on the lowest cost base in a broad market, achieved through scale, efficiency and tight cost control. Requires sustained cost advantage competitors cannot easily copy.

Differentiation strategy

Porter generic strategy offering unique, valued features that justify a premium price across a broad market. It requires attributes customers value and rivals find costly to imitate.

Focus strategy

Porter generic strategy serving a narrow segment, either through lower cost or differentiation tailored to that segment. Success depends on the segment having distinct needs poorly served by broad rivals.

Ansoff matrix

A grid of products against markets giving penetration, product development, market development and diversification. Risk increases as both product and market become unfamiliar to the organisation.

Porter value chain

Primary activities (inbound logistics, operations, outbound logistics, marketing, service) plus support activities (infrastructure, HR, technology, procurement). Advantage comes from configuring and linking activities better than rivals.

PESTEL analysis

A scan of political, economic, social, technological, environmental and legal factors affecting the organisation. It identifies macro opportunities and threats outside managerial control to inform strategy.

Transaction processing system

An information system recording routine day-to-day transactions such as sales, purchases and payments. It provides the accurate raw data on which higher-level reporting and analysis depend.

Enterprise resource planning

Integrated software running core processes on a single shared database, giving consistent data across functions. Implementation is costly and disruptive but removes duplicated records and reconciliation.

Data minimisation principle

A data protection rule that only personal data necessary for a stated purpose may be collected and held. It reduces breach impact and supports lawful, transparent processing.

Person specification

A document listing the knowledge, skills, experience and attributes required to perform a job, derived from job analysis. It underpins fair, defensible selection criteria and assessment methods.

Lewin change model

A three-stage model of unfreezing existing behaviour, introducing change, then refreezing new norms. It highlights that change needs preparation and reinforcement, not just the intervention itself.

Kotter eight steps

A change sequence: urgency, coalition, vision, communication, empowerment, short-term wins, consolidation, embedding in culture. It emphasises sequencing and visible early results to sustain momentum.

Resistance to change

Opposition arising from fear of loss, misunderstanding, low trust or habit. Managers address it through communication, participation, support and negotiation before resorting to coercion.

Corporate governance

The system of rules, board structures and controls by which an organisation is directed and held accountable. It balances stakeholder interests and underpins reliable reporting and ethical conduct.