BSBMGT517

BSBMGT517_CACLearnerGuide.pdf

Home >Business & Finance homework help >Management homework help >BSBMGT517

LEARNER GUIDE

BSBMGT517

Manage operational plan

This learner guide is copyright protected and belongs to:

T A B L E O F C O N T E N T S

TABLE OF CONTENTS................................................................................................................................1

COURSE INTRODUCTION ........................................................................................................................ 4

ABOUT THIS GUIDE ...................................................................................................................................................................... 4 ABOUT THIS RESOURCE ..................................................................................................................................................... 4 ABOUT ASSESSMENT ............................................................................................................................................................ 5

ELEMENTS AND PERFORMANCE CRITERIA ...................................................................................... 7

EVIDENCE REQUIREMENTS ................................................................................................................... 9

KNOWLEDGE EVIDENCE ........................................................................................................................................................... 9 PERFORMANCE EVIDENCE ........................................................................................................................................................ 9

ASSESSMENT CONDITIONS .................................................................................................................... 11

PRE-REQUISITES ....................................................................................................................................... 11

TOPIC 1 – DEVELOP OPERATIONAL PLAN .......................................................................................... 12

RESEARCH, ANALYSE AND DOCUMENT RESOURCE REQUIREMENTS AND DEVELOP AN

OPERATIONAL PLAN IN CONSULTATION WITH RELEVANT PERSONNEL, COLLEAGUES

AND SPECIALIST RESOURCE MANAGERS ........................................................................................... 12

MODELS AND METHODS FOR OPERATIONAL PLANS ........................................................................................................... 12 ALLOCATING RESOURCES ......................................................................................................................................................... 13

Physical Resources ...................................................................................................................................................................... 13 Human Resources ...................................................................................................................................................................... 14

HOW MUCH CAPITAL? .............................................................................................................................................................. 14

DEVELOP AND/OR IMPLEMENT CONSULTATION PROCESSES AS AN INTEGRAL PART OF

THE OPERATIONAL PLANNING PROCESS ......................................................................................... 17

CONSULTATION PROCESS ......................................................................................................................................................... 17

ENSURE THE OPERATIONAL PLAN INCLUDES KEY PERFORMANCE INDICATORS TO

MEASURE ORGANISATIONAL PERFORMANCE ................................................................................. 18

ALTERNATIVE APPROACHES TO DEVELOPING KPI’S ......................................................................................................... 19

DEVELOP AND IMPLEMENT CONTINGENCY PLANS FOR THE OPERATIONAL PLAN ........... 21

WHAT IS A CONTINGENCY PLAN? ........................................................................................................................................... 21 RISK MANAGEMENT................................................................................................................................................................... 21 CHANGES IN FUNDING ............................................................................................................................................................. 21 DISASTER RECOVERY................................................................................................................................................................. 22 CONTINGENCY PLANNING CHALLENGES ............................................................................................................................ 22 DEVELOPING THE PLAN ........................................................................................................................................................... 23 MAINTAINING THE PLAN ......................................................................................................................................................... 24

ENSURE THE DEVELOPMENT AND PRESENTATION OF PROPOSALS FOR RESOURCE

REQUIREMENTS IS SUPPORTED BY A VARIETY OF INFORMATION SOURCES AND SEEK

SPECIALIST ADVICE AS REQUIRED ..................................................................................................... 24

OBTAIN APPROVAL FOR THE PLAN FROM RELEVANT PARTIES AND EXPLAIN THE PLAN

TO RELEVANT WORK TEAMS ................................................................................................................ 26

TOPIC 2 - PLAN AND MANAGE RESOURCE ACQUISITION ............................................................. 28

DEVELOP AND IMPLEMENT STRATEGIES TO ENSURE THAT EMPLOYEES ARE RECRUITED

AND/OR INDUCTED WITHIN THE ORGANISATION’S HUMAN RESOURCES MANAGEMENT

POLICIES, PRACTICES AND PROCEDURES ........................................................................................ 28

RECRUITMENT STRATEGIES ..................................................................................................................................................... 28 JOB DESCRIPTION ....................................................................................................................................................................... 29 WAGE OR SALARY ...................................................................................................................................................................... 29 ANALYSIS OF REQUIREMENTS .................................................................................................................................................. 29 RESEARCHING SOURCES ........................................................................................................................................................... 30 ACQUISITION AND IMPLEMENTATION ................................................................................................................................... 30 INTERVIEW AND INDUCTION ................................................................................................................................................... 31

Interview .................................................................................................................................................................................... 31 INDUCTION .................................................................................................................................................................................. 32

DEVELOP AND IMPLEMENT STRATEGIES TO ENSURE THAT PHYSICAL RESOURCES AND

SERVICES ARE ACQUIRED IN ACCORDANCE WITH THE ORGANISATION’S POLICIES,

PRACTICES AND PROCEDURES AND RECOGNISE AND INCORPORATE REQUIREMENTS

FOR INTELLECTUAL PROPERTY RIGHTS AND RESPONSIBILITIES IN RECRUITMENT AND

ACQUISITION OF RESOURCES AND SERVICES ................................................................................. 33

PHYSICAL RESOURCES ............................................................................................................................................................... 33 FINANCIAL RESOURCES ............................................................................................................................................................. 33 TIME ............................................................................................................................................................................................. 34 POWER/ENERGY RESOURCES .................................................................................................................................................. 34 INFORMATION RESOURCES....................................................................................................................................................... 34 INTELLECTUAL PROPERTY ........................................................................................................................................................ 35 GOODWILL .................................................................................................................................................................................. 35 RESEARCHING SOURCES ........................................................................................................................................................... 35 ACQUISITION AND IMPLEMENTATION ................................................................................................................................... 36

TOPIC 3 - MONITOR AND REVIEW OPERATIONAL PERFORMANCE ........................................... 39

DEVELOP, MONITOR AND REVIEW PERFORMANCE SYSTEMS AND PROCESSES TO ASSESS

PROGRESS IN ACHIEVING PROFIT AND PRODUCTIVITY PLANS AND TARGETS .................... 39

TRIPLE BOTTOM LINE REPORTING ......................................................................................................................................... 39 MONITORING AND REPORTING .............................................................................................................................................. 40 MONITORING EMPLOYEES ....................................................................................................................................................... 40 PERFORMANCE APPRAISAL ....................................................................................................................................................... 41

ANALYSE AND INTERPRET BUDGET AND ACTUAL FINANCIAL INFORMATION TO

MONITOR AND REVIEW PROFIT AND PRODUCTIVITY PERFORMANCE .................................. 42

PREPARATION OF BUDGETS ..................................................................................................................................................... 42 WHY ARE BUDGETS PREPARED? .............................................................................................................................................. 43 FINANCIAL ANALYSIS ................................................................................................................................................................ 43

IDENTIFY AREAS OF UNDER-PERFORMANCE, RECOMMEND SOLUTIONS AND TAKE

PROMPT ACTION TO RECTIFY THE SITUATION ............................................................................. 45

IDENTIFICATION OF PROBLEMS .............................................................................................................................................. 45 DISCIPLINARY ACTION .............................................................................................................................................................. 46

Termination of employment ........................................................................................................................................................ 47 ACHIEVING RESOLUTION - DECISION-MAKING ................................................................................................................... 47

PLAN AND IMPLEMENT SYSTEMS TO ENSURE THAT MENTORING AND COACHING ARE

PROVIDED TO SUPPORT INDIVIDUALS AND TEAMS TO EFFECTIVELY, ECONOMICALLY

AND SAFELY USE RESOURCES .............................................................................................................. 49

OTHER SOURCES OF HELP ........................................................................................................................................................ 50 The relevant Commonwealth, State, Territory and local government ............................................................................................ 50 Accountants ............................................................................................................................................................................... 50 Solicitors .................................................................................................................................................................................... 51 Recruitment consultants .............................................................................................................................................................. 51 Banks ........................................................................................................................................................................................ 51

Books, magazines and newspapers ............................................................................................................................................. 51 Universities, TAFEs and other educational organisations .......................................................................................................... 52 Computer hardware and software organisations .......................................................................................................................... 52 Business Enterprise Centres ....................................................................................................................................................... 52

UNDERSTANDING ADVICE AND TAKING ACTION ............................................................................................................... 52

NEGOTIATE RECOMMENDATIONS FOR VARIATIONS TO OPERATIONAL PLANS AND GAIN

APPROVAL FROM DESIGNATED PERSONS/GROUPS ....................................................................... 54

VARIATIONS TO OPERATIONAL PLANS ................................................................................................................................... 54

DEVELOP AND IMPLEMENT SYSTEMS TO ENSURE THAT PROCEDURES AND RECORDS

ASSOCIATED WITH DOCUMENTING PERFORMANCE ARE MANAGED IN ACCORDANCE

WITH ORGANISATIONAL REQUIREMENTS ...................................................................................... 55

SYSTEMS TO DOCUMENT PERFORMANCE .............................................................................................................................. 55 THE CONTROL ENVIRONMENT ................................................................................................................................................ 56 THE MANAGEMENT INFORMATION SYSTEM ......................................................................................................................... 57 THE CONTROL PROCEDURES ................................................................................................................................................... 57

SUMMARY ................................................................................................................................................... 59

REFERENCES ............................................................................................................................................ 60

C O U R S E I N T R O D U C T I O N

ABOUT THIS GUIDE

This resource covers the unit BSBMGT517 - Manage operational plan.

This unit describes the skills and knowledge required to develop and monitor implementation of

the operational plan to provide efficient and effective workplace practices within the

organisation’s productivity and profitability plans.

Management at a strategic level requires systems and procedures to be developed and

implemented to facilitate the organisation’s operational plan.

This unit applies to individuals who manage the work of others and operate within the

parameters of a broader strategic and/or business plan.

No licensing, legislative or certification requirements apply to this unit at the time of publication.

ABOUT THIS RESOURCE

This resource brings together information to develop your knowledge about this unit. The

information is designed to reflect the requirements of the unit and uses headings to makes it

easier to follow.

Read through this resource to develop your knowledge in preparation for your assessment. You

will be required to complete the assessment tools that are included in your program. At the back

of the resource are a list of references you may find useful to review.

As a student it is important to extend your learning and to search out text books, internet sites,

talk to people at work and read newspaper articles and journals which can provide additional

learning material.

Your trainer may include additional information and provide activities, slide presentations, and

assessments in class to support your learning.

ABOUT ASSESSMENT

Throughout your training we are committed to your learning by providing a training and

assessment framework that ensures the knowledge gained through training is translated into

practical on the job improvements.

You are going to be assessed for:

 Your skills and knowledge using written and observation activities that apply to your

workplace.

 Your ability to apply your learning.

 Your ability to recognize common principles and actively use these on the job.

You will receive an overall result of Competent or Not Yet Competent for the assessment of this

unit. The assessment is a competency based assessment, which has no pass or fail. You are either

competent or not yet competent. Not Yet Competent means that you still are in the process of

understanding and acquiring the skills and knowledge required to be marked competent. The

assessment process is made up of a number of assessment methods. You are required to achieve

a satisfactory result in each of these to be deemed competent overall.

All of your assessment and training is provided as a positive learning tool. Your assessor will

guide your learning and provide feedback on your responses to the assessment. For valid and

reliable assessment of this unit, a range of assessment methods will be used to assess practical

skills and knowledge.

Your assessment may be conducted through a combination of the following methods:

 Written Activity

 Case Study

 Observation

 Questions

 Third Party Report

The assessment tool for this unit should be completed within the specified time period following

the delivery of the unit. If you feel you are not yet ready for assessment, discuss this with your

trainer and assessor.

To be successful in this unit you will need to relate your learning to your workplace. You may be

required to demonstrate your skills and be observed by your assessor in your workplace

environment. Some units provide for a simulated work environment and your trainer and

assessor will outline the requirements in these instances.

E L E M E N T S A N D P E R F O R M A N C E C R I T E R I A

1. Develop operational plan 1.1 Research, analyse and document resource requirements and

develop an operational plan in consultation with relevant

personnel, colleagues and specialist resource managers

1.2 Develop and/or implement consultation processes as an

integral part of the operational planning process

1.3 Ensure the operational plan includes key performance

indicators to measure organisational performance

1.4 Develop and implement contingency plans for the

operational plan

1.5 Ensure the development and presentation of proposals for

resource requirements is supported by a variety of information

sources and seek specialist advice as required

1.6 Obtain approval for the plan from relevant parties and

explain the plan to relevant work teams

2. Plan and manage resource

acquisition

2.1 Develop and implement strategies to ensure that employees

are recruited and/or inducted within the organisation’s human

resources management policies, practices and procedures

2.2 Develop and implement strategies to ensure that physical

resources and services are acquired in accordance with the

organisation’s policies, practices and procedures

2.3 Recognise and incorporate requirements for intellectual

property rights and responsibilities in recruitment and

acquisition of resources and services

3. Monitor and review

operational performance

3.1 Develop, monitor and review performance systems and

processes to assess progress in achieving profit and

productivity plans and targets

3.2 Analyse and interpret budget and actual financial

information to monitor and review profit and productivity

performance

3.3 Identify areas of under-performance, recommend solutions

and take prompt action to rectify the situation

3.4 Plan and implement systems to ensure that mentoring and

coaching are provided to support individuals and teams to

effectively, economically and safely use resources

3.5 Negotiate recommendations for variations to operational

plans and gain approval from designated persons/groups

3.6 Develop and implement systems to ensure that procedures

and records associated with documenting performance are

managed in accordance with organisational requirements

E V I D E N C E R E Q U I R E M E N T S

This describes the essential requirements and their level required for this unit.

KNOWLEDGE EVIDENCE

To complete the unit requirements safely and effectively, the individual must:

 Describe models and methods for operational plans

 Explain the role of an operational plan in achieving the organisation’s objectives

 Explain budgeting processes

 List alternative approaches to developing key performance indicators to meet

business objectives

 Outline the legislative and regulatory context relevant to the operational plan of the

organisation

 Outline the organisation’s policies, practices and procedures that directly relate to the

operational plan.

PERFORMANCE EVIDENCE

Evidence of the ability to:

 Develop and implement an operational plan using a variety of information sources

and consultation (including using specialist advice if required) which includes:

o resource requirements

o key performance indicators

o monitoring processes

o contingency plans

 Communicate effectively with relevant stakeholders to explain the plan and

supporting information, seek approvals, negotiate variations and engage work teams

 Develop and implement strategies to achieve the operational plan within the

organisation’s policies, practices and procedures including:

o recruiting, inducting and developing personnel

o acquiring physical resources and services

o protecting intellectual property

o making variations to the plan

o monitoring and documenting performance.

Note: If a specific volume or frequency is not stated, then evidence must be provided at least

once.

A S S E S S M E N T C O N D I T I O N S

Assessment must be conducted in a safe environment where evidence gathered demonstrates

consistent performance of typical activities experienced in the management and leadership field

of work and include access to:

 Relevant legislation and regulations

 Workplace documentation and resources

 Case studies and, where possible, real situations

 Interaction with others

Assessors must satisfy NVR/AQTF assessor requirements.

P R E - R E Q U I S I T E S

This unit must be assessed after the following pre-requisite unit:

There are no pre-requisites for this unit.

T O P I C 1 – D E V E L O P O P E R A T I O N A L P L A N

RESEARCH, ANALYSE AN D DOCUMENT RESOURCE

REQUIREMENTS AND DEV E LOP AN OPERAT IONAL PLAN IN

CONSU LTAT ION WITH RE LEVANT PERSONNEL,

COLLE AGUES AND SPE CI ALIST RESOURCE MANAG ERS

An Operational Plan is used to provide a clear picture of how a team, section or department of a

business will contribute to the achievement of their organisation's strategic goals. This plan will

be clearly set out as to how these teams, sections or departments will perform.

The Operational Plan should align with the strategic plan of the organisation and should

correlate with the overall objectives of the organisation. This alignment can be achieved by

ensuring that the team, section or department’s purpose aligns with the objectives of the Strategic

Plan, as well as the Operating Plan of the team, section or department.

Operational plans are used to identify:

 The goals of the team, section or department

 How the goals will be achieved

 What resources are required to meet the goals

MODELS AND METHODS F OR OPERATIONAL PLANS

The Operational Plan can be subdivided into two basic forms which include the single-use plan

and the standing plans. A single-use plan is developed to carry out a course of action that is not

likely to be repeated in the future. These plans are used once to achieve unique objectives for the

business. An example of this is when a business has a particular one off event coming up, they

may have a single-use plan to cover everything in relation to this event.

In addition, the standing plan is developed for activities that occur repeatedly over a period of

time in order for the business to help solve repetitive problems. An example of this would be a

large business that has activities repeating all the and need to be structured in a way so that

everyone knows what’s going on all the time.

Example of a type of chart used to develop operational plans - Gantt charts

A Gantt chart, commonly used in project management, is one of the most popular and useful

ways of showing activities (tasks or events) displayed against time. On the left of the chart is a list

of the activities and along the top is a suitable time scale. Each activity is represented by a bar;

the position and length of the bar reflects the start date, duration and end date of the activity.

This allows you to see at a glance:

 What the various activities are

 When each activity begins and ends

 How long each activity is scheduled to last

 Where activities overlap with other activities, and by how much

 The start and end date of the whole project

To summarize, a Gantt chart shows you what has to be done (the activities) and when (the

schedule).1

Although there are no strict rules that relate to the format of an Operational Plan they will

normally contain the following information:

 Specific goals

 Actions required to achieve goals

 Human resources required

 Physical resources required

 Budget required

 An indication of how long goals will take to achieve2

ALLOCATING RESOURCES

Resources are what your business uses to produce goods or perform services for your customers.

There are many types of resources that a business will use and they will be categorised into two

groups as 'physical' and 'human' resources.

PHYSICAL RESOURCES

1 http://www.gantt.com/ 2 https://www.dlsweb.rmit.edu.au/toolbox/leadership/toolbox/op/op_c03.html

https://www.dlsweb.rmit.edu.au/toolbox/leadership/toolbox/op/op_c03.html

Premises

Rent; rates; service costs (heating, lighting, cleaning, security) and structural

alterations

Equipment

Costs of purchase, hire or lease; insurance, running costs (service, repair)

Vehicles

Costs of purchase, hire or lease; insurance, road tax; running costs (service,

repair)

Raw

Materials

Purchase cost (investigate discount for bulk orders), cost of storage (any

special requirements for refrigeration or hazardous substances)

HUMAN RESOURCES

Human resources are your staff. They are the gears that drive the business and keep it running.

And just like with gears they need to be oiled and maintained, which, in this case, means a wage.

The majority of your expenditure for staffing will be wages and workplace insurance

contributions. When working out your resource requirements for the operational plan, you will

need to consider the costs of all your resources, including your staff.

There are also other costs relating to staff that you will need to consider including:

 Advertising for new staff

 Interview arrangements

 Training budgets

HOW MUCH CAP ITAL?

You can work out how much capital you will need to finance the operational plan by finding out

your physical and human resource requirements, as discussed above.

Capital is broken down into 2 categories:

 Fixed capital – 'One-off' payments to purchase physical resources like vehicles,

equipment, office furniture, computers and telephone systems; items that will last for

a long time and rarely need replacing.

 Working capital – These are the expenses that your business will incur whilst

attempting to make a profit. These are used for things such as wages, bills, etc.

This projection should be performed on a month-by-month basis. You will also need to take into

account that some costs will be the same each month while others will vary. For example: the

heating bill in the business should be much higher in the winter than in the summer and you may

only incur training costs once every few months, but wages will be consistent throughout the

period.

The success of your business depends above all on your ability to juggle your resources

effectively, so it's essential to get this right.

The following are just some of the typical questions which may arise and need resolving in the

process of planning and implementing operational plans:

 Are we going to be busy?

 How many staff do we need?

 Has everyone turned up for work?

 If not how can we get a replacement?

 Does everyone know what they are required to do?

 If not how are we going to show them?

 Have we got enough stock?

 If not what are we going to do about it?

 Does all the equipment work?

 Has it been serviced?

 Are the premises clean and tidy?

 Is it clear what has to be achieved?

 Are there any special instructions?

 How is the changeover of a shift undertaken?

In answering the above questions, it may be necessary to prepare and/or review such things as:

 Production schedules

 Sales orders

 Staff rosters

 Staff records

 Maintenance records

 Stock records

 Physical stock levels

 Supplier records

 Special promotions

 Policy and procedure manuals

 Special instructions

 Training manuals

DEVELOP AND/ OR IMPLE MENT CONSU LTAT ION PR OCESSES

AS AN INTEGRAL PART OF THE OPERAT IONAL P LANNING

PROCES S

CONSULTATION PROCESS

The consultation process is an extremely important concept in the context of managing an

organisation. Consultation is the process by which the management of an organisation aim to

better understand the needs, wants and expectations of its stakeholders.

Consultation with the organisation and its stakeholders can be conducted through management

opening communication channels between the two parties. These can be formal or informal.

These formal and informal communication channels might include:

 Open meetings - stakeholders are invited to attend one or more open meetings

 Surveys – management can request a survey (paper or online type) to be completed

 Focus group –similar to open meetings, however, the number of participants is

smaller

 Invitation to send a written response - stakeholders are invited to submit comments

in writing on a proposal or plan

 Informal meetings - organisation management might mingle with people at an event

and canvass certain ideas and see what response they get

The purpose of consultation is three-fold:

 To procure information on the wants, needs and expectations of the stakeholders

 To invite stakeholders to comment on plans that have been created by organisation

management that directly affect them

 To quell any criticism towards organisation management about not taking account of,

or not listening to the needs of stakeholders in developing strategic and operational

plans

Generally speaking, if a plan is conceived without proper consultation with stakeholders then it

has far less chance of successful implementation.

ENSURE THE OP ERATION AL PLAN INCLU DES KE Y

PERFORMANCE INDICATO RS T O MEASURE

ORGANISAT IONAL PERF O RMANCE

Key Performance Indicators (KPI), or Key Success Indicators (KSI), are designed to assist an

organisation define and measure its progress toward organisational goals.

The organisation will need a way to measure its progress towards the goals. This can be done by

using KPIs. Implementing these Key Performance Indicators will occur after the organisation

has analysed and identified its mission, stakeholders and goals.

KPIs are significant measurements that reflect and establish the critical success factors of an

organisation. They will vary from one organisation to another and should be determined quite

early in a company’s lifespan. They will also need to be reviewed as the potential goals of the

business may change over time.

For example, A business may have one of its KPIs as the total percentage of its income that it

procures from return customers.

Key Performance Indicators allow you to ensure that you are reaching your overall business goals

and objectives.

There are eight areas of a business organisation in which performance and results should be set

and reported they are:

 Market standing measured against the potential market, competitor results and new

market products and service objectives

 Innovation in such things as new products/services, improvements to existing

products and improvement in all aspects of the business

 Productivity

 Use of resources

 Profitability

 Performance and development of managers

 Performance and attitude of employees

 Public responsibility

Each of these broad areas would have a number of key performance indicators which would be

designed to ensure the organisation meets its objectives and that day to day operations are

conducted to achieve this aim.

ALTERNATIVE APPROACH ES TO DEVELOPING KPI ’S

There are a number of approaches to developing KPIs and some suggestions appear below. You

are encouraged to identify approaches that are most relevant to their unique business outcomes

and activities.

 Statutory & Regulatory Requirements - It may be appropriate to focus selection of

KPIs on statutory and regulatory requirements and obligations.

 Lifecycle approach - KPIs may be developed using the record lifecycle. KPIs would

be developed for each life cycle stage.

 Risk-based - The risk based approach identifies those specific services, functions or

activities that may have a negative or detrimental impact on the organisation. In

general terms, there are a number of methods for identifying risk and these normally

have two parameters:

o Likelihood/probability of a risk occurring, and

o The impact of a risk occurring5.

 By identifying areas of risk, KPIs could be used to measure progress towards

mitigating the risk.

 Cause & Effect - A suggested approach is to examine specific areas of concern using

the cause and effect technique. The cause and effect technique might assist with

identification of KPIs to address the fundamental or underlying cause of ineffective

or inefficient services, functions or activities. The approach analyses the cause(s) and

identifies KPIs that address the effect. By addressing the effect, improvements can

generally be achieved.

 Levels - It is also suggested that the agency base KPIs on two levels as follows:

o Strategic KPIs; and

o Operational KPIs.

 It is important to note that some KPIs might be relevant and appropriate to both

strategic and operational levels.

DEVELOP AND IMPLEMEN T CONTINGENCY PL ANS F OR THE

OPERAT IONAL PLAN

WHAT IS A CONTINGENCY PLA N?

A contingency plan is a plan devised for an outcome other than in the usual, expected plan.

The management of operational plans is partly dependent upon how an organisation identifies,

assesses and takes action on the potential risks that can occur within the business.

RISK MANAGEMENT

Risk management is concerned with how each organisation deals with its risks.

Some organisations do not have sufficient formal processes in place to deal with risks, but simply

take reactionary measures when these situations arise. An organisation which has formal risk

management approaches would incorporate them into its strategic and operational plans. Such an

approach may include the following:

 Identification of the broad areas of risk faced by the organisation

 The development of a risk management plan and documentation to include:

o Major risks

o Measurement of each risk

o How each risk is currently managed?

o Plan to deal with risks not properly controlled/managed

o Incorporation of risk management plans into strategic and operational plans

CHANGES IN FUNDING

The management of the organisation’s operational plans can be affected by funding changes

including:

 Refinancing arrangements

 Loans from new financiers

 Extensions to existing finance facilities

 Sale of assets and leasing them back

 Factoring (selling amounts owed by customers to a third party)

 Obtaining new lines of credit

 Acquiring assets on hire purchase

 Leasing, e.g. Premises, vehicles

Contingency plans will need to be developed to help the organisation deal with changes in

funding.

DISASTER RECOVERY

Businesses may suffer disruptions to operations following some form of disaster, natural or

otherwise, as well as other problems such as power failures.

Organisations should plan to cope with these sorts of incidents and have disaster recovery

procedures in place to minimise the disruption.

These procedures may include:

 Availability and use of alternative premises to act as a recovery site

 Sources of equipment and ability to acquire these at short notice

 Use of backup data stored offsite

 Redirection of telephone and fax lines

 Obtaining new stationery/documentation

 Notification to customers, suppliers and other relevant parties of any changes that

have occurred in regards to normal operation

 Backup suppliers and services if main sources become unavailable; e.g. main supplier

goes bankrupt

CONTINGENCY PLANNING CHALLENGES

There are two common obstacles that you should be aware as you begin your contingency

planning process. These are:

 Due to such a strong, emotional investment and desire to see it succeed, with their

Plan A, many people will be reluctant to develop a strong Plan B

 Because of the low chance of a disaster actually occurring many people will

procrastinate when it comes to contingency planning and push it to the bottom of

task lists. This could mean that it never gets completed and leave the organisation at

risk should the worst happen

DEVELOPING THE PLAN

Here are some general guidelines to follow that will assist you when you are preparing your

organisation’s contingency plan:

 Your main goal is to maintain business operations – Look closely at what you

need to do to deliver a minimum level of service and functionality

 Define time periods – What must be done during the first hour of the plan being

implemented? The first day? The first week? If you look at the plan in this way, you're

less likely to leave out important details

 Identify the trigger – What, specifically, will cause you to implement the

contingency plan? Decide which actions you'll take, and when. Determine who is in

charge at each stage and what type of reporting process they must follow

 Keep the plan simple – You don't know who will read and implement the plan

when it's needed, so use clear, plain language so anyone can understand the plan

easily

 Consider related resource restrictions – Will your organisation be able to function

the same way if you have to implement Plan B, or will Plan B necessarily reduce

capabilities?

 Identify everyone's needs – Have people throughout the company identify what

they must have, at a minimum, to continue operations

 Define 'success' – What will you need to do to return to 'business as usual'?

 Include contingency plans in standard operating procedures – Make sure you

provide initial training on the plan and keep everyone up-to-date on changes

 Manage your risks – Look for opportunities to reduce risk, wherever possible. This

may help you reduce or even eliminate, the need for full contingency plans in certain

areas

 Identify operational inefficiencies – Provide a standard to document your

planning process, and find opportunities for performance improvement

MAINTAINING THE PLAN

As your business grows and changes, you'll need to review and update your contingency plans

accordingly. You will need to keep the document updated and relevant, you don’t want to just

create it and file it away to be forgotten about.

Here are some key steps in the contingency plan maintenance process:

 Communicate the plan to everyone in the organisation

 Inform people of their roles and responsibilities related to the plan

 Provide necessary training for people to fulfil these roles and responsibilities

 Conduct disaster drills where practical

 Assess the results of training and drills, and make any necessary changes

 Review the plan on a regular basis, especially if there are relevant technological,

operational, and personnel changes

 Distribute revised plans throughout the company and make sure that old plans are

discarded

 Keep copies of the plan off-site, and in a place where they can be accessed quickly

when needed

 Audit the plan periodically:

o Reassess the risks to the business

o Analyse efforts to control risk by comparing actual performance with the

performance levels described in the contingency plan

o Recommend and make changes, if necessary

ENSURE THE DEVELOPME NT AND PRESE NTAT ION OF

PROPOS ALS FOR RESOU R CE REQUIREMENTS IS S UPPORTED

BY A VARIETY OF INF O RMAT ION S OURCES AND SEEK

SPECIALIST ADVICE AS REQU IRE D

You may need to consult with relevant personnel, colleagues and specialist resource managers to

identify the needs of the work environment that you are concerned with.

To identify the resources required, you might:

 Review similar projects and understand resources used

 Estimate time required based on your personal experience

 Use external resources for information

 Research any constraints on available resources

You might involve the following people to help them identify resources:

 Internal specialists including HR, purchasing, OHS, finance, etc.

 Other managers or supervisors affected by the proposal

 Team members

In any case, you will need to develop and present proposals that are professional and

comprehensive in order to meet the resource requirements of the business.

OBTAIN APPROVAL F OR THE P LAN F ROM RELE VA NT

PARTIES AND E XPLAIN THE PL AN T O RE LEVANT WORK

TEAMS

You will need to have your plan approved by the appropriate person/people. Relevant parties

involved in obtaining approval for an operational plan can be as followed:

 Stakeholders

 Management

 Work team

Once you have drawn up an operational plan the approval process may follow a similar structure

as shown below:

This operational plan review process is a basic outline of the process involved in implementing

an operational plan. You must first obtain the approval of your team or the team members

involved in implementing and executing the operational plan. This is a vital step as without their

input and approval the operational plan may have a higher chance of failure. You should review

any and all suggestions from all parties involved in the implementation of the plan before

applying for approval from executive management.

The personnel who are responsible for the formulation of a plan must consult with all

persons/stakeholders who will be affected by said plan. For example, a budget for any area of the

organisation’s operation should not be created or setup without consultation with people who

work in those areas.

Creating and implementing an Operational Plan without consulting the relevant parties can

disadvantage the organisation because:

 A lack of consultation fails to take advantage of all available knowledge and expertise

 A lack of consultation makes people feel left out and creates negativity toward the

emerging plan

T O P I C 2 - P L A N A N D M A N A G E R E S O U R C E A C Q U I S I T I O N

DEVEL OP AND IMPLEMEN T STRATEGIES TO ENSU RE THAT

EMPLOYEES ARE RECRU I TED AND/OR INDUCT ED WITH IN

THE ORGANISATION’ S H UMAN RESOURCES MANAG EMENT

POLICIES, PRACTICES AND PROCEDURES

RECRUITMENT STRATEGI ES

Recruiting and selecting the right staff to perform the activities within your operational plan is

crucial to the successful implementation of the operational plan.

You will need to check your workplace policies and procedures to identify whether there are

specific procedures and policies that you are required to follow. Your organisation will have

developed policies and procedures that are designed to ensure that the best candidate is selected

and that relevant legislation, such as Anti-discrimination, is complied with.

It is unlawful to discriminate against an individual on the grounds of:

 Age

 Disability

 Marital status

 Nationality, race, colour, ethnic background

 Parental status

 Pregnancy/potential pregnancy

 Religion

 Sexuality/sexual preference

The first step in the recruitment process is to gain approval for the new position.

Approval may need to be sought from your senior manager or the Human Resources Manager.

You will need to complete an appropriate form such as a "Request to recruit" form.

JOB DESCRIPTION

You will need to refer to the Job Description for the position that you are recruiting for and

assess whether it accurately describes the role, responsibility and authority of the position. You

will need to liaise with the Human Resources Manager if changes need to be made to the job

description.

A well-written job description should include the following information:

 Duties and tasks expected to be performed.

 Standard of performance expected. Here you would specify measurable key

performance indicators.

 Reporting arrangements for the position

WAGE OR SALARY

The Human Resources team will usually have responsibility for placing an advertisement to

attract candidates. It is essential that the advertisement is designed to attract suitable candidates

and is free from any discriminatory language. The advertisement will typically require candidates

to forward a job application which describes their:

 Work background and experience

 Personal qualities and skills

 Special skills and or knowledge

 Formal educational qualifications or work certifications

You may be asked for your ideas regarding where to place the advertisement. Increasingly, job

advertisements are posted online. If the position is a specialist or technical position, it may be

effective to advertise in the related professional journal. Vacancies may also be advertised in

national or local newspapers or through one of the many internet career websites.

ANALYSIS OF REQUIREM ENTS

Human resource requirements need to be analysed to determine what is required in the way of

quality, quantity, time when needed and cost. Analysis of human resource requirements, for

example, would need to consider:

 Levels of work activity/output required

 Skill required

 Staff availability

 Outsourcing plans

 Cost of employing staff

 Locations

 Planned growth

 New products

 Changes in legislation

RESEARCHING SOURCES

Each resource also needs to be researched to find the best source. Human resource sources may

include:

 Consultants

 Head-hunters

 Universities/colleges

 Professional bodies

 Competitors

 Media advertising

 Overseas

ACQUISITION AND IMPL EMENTATION

This aspect of managing operational plans is concerned with processes to acquire resources, e.g.

recruitment of staff, negotiating loans and purchase of materials.

Operational staff often have the responsibility for appointing staff. This may entail determining

the work to be performed, the wage rate and other conditions. Aspects include:

 Determining sources

 Advertising

 Respecting privacy

 Screening applications

 Conducting interviews

 Reference checking

 Medicals

 Making offers including wage rates and other conditions

 Informing applicants

 Finalising contracts

INTERVIEW AND INDUCT ION

INTERVIEW

The Human Resources team may have developed a bank of questions and pre- screening

processes that you may be able to use. Many organisations now conduct telephone interviews to

cull applicants and then only invite a short-list of candidates to attend a face-to-face interview.

You will also need to comply with your organisation's requirements in terms of the format of the

job interview. Small organisations may have only one person conducting the interview. Medium

to large firms, including Government organisations, will usually convene an interview panel

comprised of at least three people. This format helps to ensure that the interview is free of bias

and discrimination and brings a greater experience to bear on the process of selecting the

successful candidate.

You will need to confer with members of the panel to prepare questions and specimen answers

so that each panel member can openly judge the applicant's responses and attributes for the

position.

These questions must:

 Refer only to the specific requirements of the position

 Be presented to each candidate for response

 Be designed to ensure that any bias cannot be implied

Various styles of questions may be used. Unless you specifically want the candidate to answer yes

or no make sure you ask open ended questions. For example:

"Have you ever worked in a customer service team?" - could be answered yes or no.

"Can you give me an example of how you effectively resolved a customer complaint?" - will

provide an opportunity for the candidate to reflect on their experience and knowledge and give

you a greater insight into the qualities they could bring to the position.

INDUCTION

Induction training may last for a number of days but a typical checklist for the first day of work

might include the following:

 Welcome

 Confirm hours of work, leave, medical, sickness and breaks

 Confirm wage and superannuation arrangements

 Review job description

 Introduction to other staff

 Issue uniforms and safety gear

 Locker and change rooms

 Obtain bank account details

 Outline the job and how it fits into the team/department

 Physical tour of work environment

 Employee workstation supplies and equipment

 Emergency procedures

 Signing of documents such as confidentiality, tax, contracts

 Transport and parking

 Evaluation of the induction program

DEVELOP AND IMPLEMEN T STRATEGIES TO ENSU RE THAT

PHYSICAL RE SOURCES A ND SERVICE S ARE ACQU IRED IN

ACCORDANCE WITH THE ORGANISAT ION’S POLIC IES,

PRACT ICES AND PROCED URES AND RE COGNISE AND

INCORP ORATE REQUIREM ENTS FOR INTELLECTUA L

PROPERTY RIGHTS AND RESPONSIB IL ITIES IN

RECRU ITMENT AND ACQU IS IT ION OF RE SOURCES AND

SERVICES

Organisations use resources to achieve their objectives. There are many types of resources and

not all organisations use all of them, e.g. a small travel shop may be owned and operated by one

person who is quite satisfied with the size of the business therefore having no need for resources

such as staff or finance for expansion, but uses mostly physical resources in their shop. There are

7 other types of resources to utilise, as follows:

PHYSICAL RESOURCES

Land, buildings, equipment and stock comprise the physical resources of a business which need

to be used properly in the management of operational plans, e.g. stock is vital to a manufacturing

business which buys raw material and converts this into finished goods for sale to customers.

Stock to the manufacturer comprises raw materials, work in progress being the part complete

production and finished goods awaiting sale.

Stock control necessitates having the correct levels of raw material on hand so that production is

not interrupted but not having too much so that money is being tied up unnecessarily and where

wastage may arise due to damage, loss or other problem. Production processes should ensure as

little wastage as possible.

FINANCIAL RESOURCES

Financial resources need to be planned carefully and managed on a day to day basis. Paying too

much for other resources such as raw materials, stock and equipment or wasting resources, e.g.

electricity/telephone will cause a drain on existing financial resources and other sources of

finance may not be available. Some organisations may also lose money by extending credit to

customers without carrying out adequate credit checks on the customer say through credit

checking businesses such as Baycorp, Australian Business Research or Dun & Bradstreet. Policies

such as obtaining personal or director guarantees may also need to be implemented and the debt

recovery process should work including the use of debt collection agents or solicitors if

necessary.

TIME

Time is a form of the resource; there is a saying 'time is money'. Doing things late or at the

wrong time may be a total waste for an organisation. The following aspects may have a

detrimental impact on the use of time if not handled correctly:

 No follow-up procedures

 Number and type of customer complaints

 Telephone interruptions

 Meeting procedures

 Policies and procedures

 Delegation and authority

 Duplication of effort

 Deadlines not established

 Poor planning

 Decisions delayed

 Too much paperwork

 Cluttered desks and other work areas

 Changing priorities too frequently

 Not completing tasks

 Poor layout

 Lack of training

 Product faults

POWER/ENERGY RESOURC ES

Power/energy is another important type of resource particularly for example manufacturing

organisations which are dependent upon such things as electricity, water and gas to operate

factories and machines.

INFORMATION RESOURCE S

Information is a resource which needs to be planned and managed by organisations. Too little,

too much, wrong interpretation and failure to notify events to relevant people within and outside

an organisation are some of the problems which may arise with this resource.

INTELLECTUAL PROPERT Y

Intellectual property represents ideas of the mind or intellect including inventions and designs.

Trade secrets, patents, trademarks and copyright are some of the main types of intellectual

property which need to be planned and managed.

GOODWILL

Goodwill is a resource which arises from past actions but which may be wiped out if an

organisation does not maintain appropriate and relevant operating standards on a day to day

basis.

Each resource type needs to be analysed to determine what is required in the way of such things

as quality, quantity, a time when needed and cost. An analysis of requirements in regard to land,

buildings and equipment would need to take into account things such as:

 Planned growth

 New products

 Locations

 Availability

 Costs

 Finance policy, e.g. Purchase v leasing

 Maintenance

 Age

 Technology changes

 Capacity

 Renewal policy

RESEARCHING SOURCES

Each resource also needs to be researched to find the best source. Researching sources of land,

buildings and equipment could include:

 Brokers

 Estate agents

 Tenders

 Media

 Offers

 Overseas

ACQUISITION AND IMPLEMENTATION

Finance is a key resource for all organisations and it often falls to operational staff to negotiate

new finance facilities or drawdown against existing loan arrangements. Sources of finance

facilities include:

 Banks in the form of loans, overdrafts, business line of credit or bill line

 Owner's funds

 Other private investors

 Family loans

 Contra deals

 Barter

 Consignment stock

Negotiating a loan is a skilful exercise which may commit the organisation to mortgaging assets

and repayment of significant interest. There may be other traps for the unwary such as onerous

reporting requirements and restriction on the ability to borrow further funds. Accordingly a

solicitor or financial advisor should be consulted to review loan documentation and the

arrangement generally before finalising the transaction.

A drawdown on an existing facility is where an overall loan facility of say $1 million is used by

the organisation as and when needed by `drawing down' part of the total facility, e.g. the facility

may be established in January for the construction of a new building: $100,000 may be drawn

down in February and $50,000 in March as work on the building proceeds leaving $850,000 still

to be drawn down as at 1 April.

Land buildings and equipment may need to be acquired, such as:

 Land

 Buildings

 Storage facilities

 Materials

 Storage facilities

 Materials

Operational staff members are often involved in these acquisitions which may be for normal

operating levels or for seasonal peaks.

Guidelines to assist staff in these acquisitions include:

 Bought outright or on terms

 Leased or bought

 Borrowed

 Use of offsite arrangements, e.g. storage

'Materials' comprises such things as:

 Raw materials used in a production process

 Finished stock for sale to customers

 Consumable supplies such as oil, paint and spare parts

Acquisitions of materials may be made by a central purchasing department for delivery to

operating sites or locally by each site.

Either way the organisation should have a purchasing policy to be followed, which should

include the following:

 Documentation, e.g. order form

 List of preferred suppliers

 Prices and discounts

 Quality standards

 Delivery arrangements

Power/energy in the form of electricity, gas, oil and water is needed to operate factories, offices

and store operations. Supplies are obtained from relevant authorities most of which are now run

by private enterprises. It is important to ensure that supplies are obtained from the most

economical tariff, e.g. electricity may be cheaper during the night, and:

 That any deposit bond is lodged

 Equipment is correctly installed

 Operational staff understand how to access standby facilities in case of interruption

to supply

 Faults are reported promptly

Information systems need to be installed to provide the relevant facts and figures to operational

staff when needed. Information systems may be internal or external, e.g. the internet. It is

important that the information system can provide the correct quantity and quality of

information to help operational management plan and control day to day activities.

Intellectual property can be acquired and implemented in regard to the main types as follows:

 Trade secrets

o Includes methods of processing or manufacture and the ingredients used as

well as things such as customer lists

o Protection is via confidentiality agreements stopping others from revealing or

using the information and/or not starting up a similar business within a

certain area

 Patents

o Protects inventions and processes. Protection is obtained by registering a

patent with the Patents Office through IP Australia or in relevant overseas

countries

 Trade names

o Protects letters, numbers, phrases, symbols, sounds, logos or pictures or a

combination of these. Protection is obtained by applying to IP Australia's

Trade Marks Office

 Copyright

o Books, articles, films, computer programs and promotional material.

Protection through relevant laws and agreements

Operational staff may be involved in the acquisition and implementation of this resource but should seek the advice and assistance of experts such as solicitors and patent attorneys. Goodwill is an intangible asset which may be acquired:

 As part of the price involved in buying a business through such things as product

reliability, service, price and personal relationships

T O P I C 3 - M O N I T O R A N D R E V I E W O P E R A T I O N A L P E R F O R M A N C E

DEVELOP, MONITOR AND REVIEW PERFORMANCE SYSTEMS

AND P ROCESSES TO ASS ES S PROGRESS IN ACHI E VING

PROFIT AND P RODUCT IV ITY P L ANS AND TARGET S

TRIPLE BOTTOM LINE R EPORTING

Triple bottom line is a process which means organisations have objectives and

monitoring/reporting systems dealing with the following matters:

 Financial/economic

 Social

 Environmental

These three matters are constantly changing due to political, economic and public pressure but

they are also interrelated, i.e. society depends upon the economy, which depends on the global

ecosystem. Many organisations report on environmental performance through such things as

impacts and initiatives. Social reporting is a developing area and Westpac Banking Corporation

recently produced a social impact report covering such things as:

 Employee turnover and job creation, employee satisfaction, management

remuneration, female/male salary comparison

 Institutional banking including third world debt and global country profiles

 Suppliers including social and environmental checking on practices employed

The `balanced scorecard' is a performance reporting system which complements the traditional

financial measures of past performance with measures of the drivers of future performance in

relation to:

 Customers - performance measures relating to things such as market share, customer

acquisition, retention, satisfaction and profitability

 Internal organisational processes-things which the organisation must do well if it is to

achieve its objectives

 Learning and growth, e.g. employee satisfaction, productivity and retention.

MONITORING AND REPOR TING

We live in an ever-changing world with customer demands/tastes, a new technology, product

developments, staff skills and improved equipment being some examples of things which impact

on results/performance. Organisations need to monitor these things and make appropriate

changes to designs, resources or processes to ensure survival.

Variance analysis is a financial control system whereby planned figures in budgets and standard

costs of production are compared with actual figures incurred to give differences known as

variances. These variances may be favourable, i.e. where actual sales are higher than the budget

plan or actual costs are lower than that budgeted. Unfavourable variances are where the reverse

situation arises. Variance analysis also includes determining the reasons for the differences and

taking corrective action. Usually, the accounting system is structured so that variances can be

reported to those responsible.

A typical budget report for the month of February and year to date (from the start of the

financial year, being 1 July) could be as follows:

February YTD

Budget $ Actual $ Variance$ Budget $ Actual $ Variance$

Sales 1000 1100 100 (F) 7500 7200 300 (U)

Costs 650 660 10 (U) 1500 1450 50(F)

YTD = Year to date

(F) = Favourable

(U) = Unfavourable

MONITORING EMPLOYEES

Herzberg has suggested that hygiene and motivator factors affect employee behaviour. Hygiene

factors prevent dissatisfaction and include working conditions, wage levels, rules and regulations

and relationship with colleagues. Motivating factors can include achievement, recognition, and

nature of the work, responsibility and opportunities for growth. These are the factors which

motivate employees. In addition employee, rewards need to be performance related, e.g. profit

sharing, employee share plans and team based incentive schemes.

Monitoring employees includes an understanding of the above mentioned and such things as:

 Disciplinary action

 Termination process

 Grievances and personal problems

 Dealing with problem people

 Performance appraisal

PERFORMANCE APPRAISA L

Performance appraisal includes completing a confidential questionnaire relating to the

job/employee, assessing whether objectives previously agreed have been met, having the

questionnaire signed by the employee and supervisor, carrying out an interview with the

employee and agreeing development objectives for the next period.

As well as determining if objectives have been achieved, the process should also assess things

such as:

 Accuracy

 Quality

 Attendance

 Work approach

 Safety

 Communication

 Knowledge

 Motivation

 Co-operation

 Focus on the customer and/or the public

ANALYSE AND INTERPRE T BU DGET AND ACTU AL

FINANCIAL INF ORMATIO N TO MONIT OR AND REV IEW

PROFIT AND P RODUCT IV ITY PE RFORMANCE

Budgeting is the process of planning an organisation's sales, production, expenses, cash flow,

assets and liabilities for a specified future time period.

Financial analysis involves consideration of the profitability, solvency and liquidity of the

organisation and may compare results/figures with those applying to competitors and/or in the

industry or as trends.

PREPARATION OF BUDGE TS

Most organisations prepare budgets. Some larger organisations spend many months each year in

considering finalising and issuing agreed budgets to the relevant sections/areas responsible for

their implementation and operation. Some smaller organisations have far less sophisticated

methods and in some cases the budget may be something which the owner/operator has in mind

but does not commit to paper.

A budget is a plan of an organisation's proposed future operations for a specified period of time,

e.g. one year and summarised in financial terms such as sales, expenses and cash flow.

A budget is usually broken down to individuals responsible for various activities. The sales

budget may be broken down by geographical area if that is how the organisation is structured,

e.g. there may be a Queensland sales manager and a Victorian sales manager who would be

responsible for separate sales budgets in their respective states.

Budgets may be prepared for a 12-month period broken up into calendar months or 13 four-

weekly periods. These periods may be dissected even further into weeks or even days. Much

thought needs to go into their preparation, e.g. forecasting sales may be very difficult and needs

to take into consideration factors such as:

 Production capacity

 Past sales achieved

 Industry trends

 Competition

 New products planned

 Pricing policy

 Advertising

 The economy

 The law

WHY ARE BUDGETS PREP ARED?

Budgets are prepared for a number of reasons including:

 Planning operational activities

 Coordinating operational activities, e.g. Advertising, sales and production budgets

need to be integrated. Otherwise, shortages or over-stocking may occur

 Estimating future profit and cash flow

 A means of evaluating performance, i.e. Budgeted sales figures can be checked

against actual figures achieved and appropriate bonuses and/or other incentives given

for high performance

 Allocating resources such as finance for capital expenditure and people to be

employed in say the production area

Budgets may be imposed on operational management in some organisations with little or no

input allowed. This may create a problem as people may not feel committed to achieving the

targets and/or may feel the targets are unrealistic.

FINANCIAL ANALYSIS

Analysing the financial well-being of an organisation is an often neglected aspect of an

organisation's operational plan. Often business owners and/or managers do not understand

accounting principles or other issues involved in financial analysis.

Financial analysis involves seeking answers to questions such as the following:

 Do we charge the right prices for our products or services?

 Is our discount policy appropriate?

 What is the trend in the sale of our products or services?

 What profit are we obtaining on our various products or services?

 Do we know the best method of selling to our customers?

 Do we offer appropriate credit terms to our customers?

 Are our customers paying on time?

 Are our expenses too high?

 Do we pay too much in buying from our suppliers?

 Are we carrying too much stock?

 Do we have enough money to pay our bills on time?

 Do we have too much cash earning low or little interest?

 Are we borrowing too much money?

 Are our internal control systems adequate?

An organisation can employ a variety of approaches to obtain answers to these questions

including:

 Keeping good records, i.e. Clearly understood and accurate

 Ensuring transaction processing methods are satisfactory, e.g. Timely with no errors

 Using appropriate computer software

 Monitoring trends, e.g. Number of customers per hour

 Comparing actual figures with budgets and analysing these variances to determine the

reason for the difference

 Analysing the age of debts owed to the organisation by customers

 Ensuring appropriate reports are issued to those responsible for the activity

 Preparing ratios comparing figures, e.g. Assets employed compared to profit

 Market research

The financial analysis may also be undertaken by using figures from competitors or appropriate

industry standards.

It is important that you practice analysing and interpreting budgets and actual financial

information. You should arrange to access this information in your workplace and prepare a

report that analyses profit and productivity performance.

If you are not currently employed, you may use the Internet to access the Annual Report of an

organisation that interests you and practice analysing and interpreting the information presented.

IDENT IFY AREAS OF UN DER-PE RFORMANCE, REC OMMEND

SOLUT IONS AND TAKE P ROMP T ACT ION T O RECT IFY T HE

SITUAT ION

A variety of problems can arise in the management of operational plans. These problems need to

be identified as soon as possible and resolution achieved.

Problems in the day to day operation of a business can arise from a number of sources including:

 Customers

 Suppliers

 Employees

 Contractors

 Product deficiency

 Equipment

 Finance

 Climate

IDENTIFICATION OF PR OBLEMS

It is obviously better to identify problems as soon as possible and certainly well before they reach

crisis point. Problems may be identified through a variety of means including:

 Routine planned maintenance of equipment disclosing issues

 Plant and other equipment breakdowns

 Vehicle servicing showing faults needing attention

 Audits uncovering weaknesses in financial and other controls

 Reports showing downward trend in sales and upward trend in costs

 Accidents highlighting occupational health and safety weaknesses

 Environmental issues such as spills leakages and air pollution

 System failures, e.g. Computer breakdowns

 Age of equipment

 Level of interest being paid on loans

 People conflicts and performance

 Breaches of compliance with laws and regulations

 Appearance of workplaces, e.g. Factories, shops

 Customer feedback

 Criticism from stakeholders, e.g. Suppliers, shareholders and employees

 Workloads/backlogs

 Disasters, e.g. Fire

 Climate, e.g. Rainfall

Each of these problem areas needs a different approach to being resolved, some of which are

self-evident, e.g. vehicle faults need to be repaired and/or vehicles replaced with drivers

instructed to drive more carefully if this contributed to the fault.

In regard to customer feedback, it is usually well worth a business putting the following in place:

 Make it easy for customers to complain if they are dissatisfied

 Deal with the complaint straight away through a complaint handling system

 Make sure staff are trained to handle complaints well and have the authority to

resolve problems

DISCIPLINARY ACTION

Disciplinary action may be needed for unsatisfactory performance by an employee.

Unsatisfactory work performance or conduct may include:

 Neglect of duties

 Breach of discipline

 Absenteeism

 Non-compliance with safety standards

Formal discussions and warnings including written communication should be followed.

If performance does not improve then, the termination process may need to be commenced.

TERMINATION OF EMPLOYMENT

An employer may terminate services where there is a valid reason, e.g. employee's capacity or

conduct or operational requirement of the organisation. However, great care should be taken to

avoid unfair dismissal claims.

It is illegal to terminate employment for reasons such as:

 Temporary absence from work because of illness or injury

 Filing a complaint against an employer or appearing as a witness involving alleged

violation of laws or regulations

 Discriminatory reasons including race, colour, sex, age, physical or mental disability,

marital status, family responsibilities, pregnancy, religion, political opinion or

nationality

An employee's employment can usually be terminated without notice or payment in lieu for

misconduct including:

 Theft

 Violence

 Harassment

 Assisting the opposition

 Serious negligence

ACHIEVING RESOLUTION - DECISION -MAKING

Achieving a resolution to problems involves decision-making techniques and may need to

consider such things as:

 Organisational policy

 Obtaining help in the form of mentoring/coaching

 Using alternate sources of supply for goods/staff

 Transferring staff from other duties

 Training

 Repairing or replacing goods

 Refunds

 Seeking out further sources of finance

Good decision-making technique is often an important aspect of resolving problems.

There are five distinct stages in any decision-making process:

 Defining the problem

 Analysing the problem

 Developing alternative solutions

 Deciding upon the best one

 Converting the decision into effective action

Each of these stages has several steps and includes identifying the real problem and not just the

symptoms, getting all the necessary facts and working to appropriate timeframes.

PLAN AND IMPL EMENT S YSTEMS TO ENSURE T HA T

MENTORING AND COACHI NG ARE PROVIDED T O S UPP ORT

INDIVIDUALS AND TEAM S TO E FFECTIVELY,

ECONOMICALL Y AND SAF ELY USE RESOU RCES

Coaching, mentoring and other forms of help may be used in managing operational plans.

Operational managers need to:

 Assess, which sources of coaching, mentoring, and other help may be beneficial

understand the advice and information obtained

 Take appropriate action to improve the business

Coaching and mentoring are activities used by some organisations to ensure that business owners

and/or employees receive expert guidance for managing the workplace. There is an old saying

`two heads are better than one'. Mentoring may usually be on a one on one basis whereas

coaching can be individual or to a group/team.

Coaching in business is the process of using an external source of expertise to help in the

running of the business, either of a particular aspect or the entire business.

Business coaching may help to:

 Transform a business by providing direction and vision

 Get things done, e.g. help with problems

 Provide information

 Market effectively

 Challenge boundaries, e.g. comfort zones

 Make a website work

 Make more profit by, for example, creating a supportive and results orientated

climate

 Stop owners/employees working too hard by being more effective in how they work.

A good business coach:

 Challenges

 Supports

 Inspires

 Help achieve consistent action

The advice may be tendered in some cases through telephone discussions and written

communication without the coach having to visit the business premises.

The Small Business Development Corporation in each state has teams of experienced

professional advisors who can assist in the development of new or existing businesses. The

Corporation provides a one on one mentoring service through the start-up, growth and survival

phase of a business's lifespan.

OTHER SOURCES OF HEL P

The following are some of the main sources of help/information available in the day to day

management of operational plans:

THE RELEVANT COMMONWEALTH, STATE, TERRITORY AND LOCAL

GOVERNMENT

The relevant Commonwealth, State, Territory and local government department and agencies

include the following:

 Australian Taxation Office (ATO) providing free information and training

 State Revenue Offices (SRO) covering stamp duty, land tax and payroll tax

 Australian Competition and Consumer Commission (ACCC) for trade practices

 Australian Customs Service (ACS) for importing and exporting

 Australian Securities and Investments Commission (ASIC) for company law

 Intellectual Property Australia (IP Australia) covering patents and trademarks

 Federal, State and Territory government centres for starting and running businesses.

ACCOUNTANTS

Accountants can provide help and information on a number of the issues involved in the day to

day management of operational plans particularly:

 The setting up and running of an accounting system

 Establishing a budget system and monitoring/reporting results

 Obtaining finance

 Internal control

 Preparing accounting policy and procedure manuals

SOLICITORS

Solicitors can assist in things such as the following:

 Compliance with relevant laws and regulations

 Legal aspects relating to the recruitment, employment and termination of employees

 Obtaining patents and trademarks

 Defending actions against the business

 Representing the business in claims against third parties

 Assisting with due diligence if business assets are acquired

 Advice on and review of contracts, e.g. Leases

RECRUITMENT CONSULTANTS

Provide services in regard to the appointment of employees for the business.

BANKS

Banks provide services such as assisting in preparing business plans and as a source of finance

some of which are suitable for the day to day management of operational plans, e.g. overdraft

facilities.

BOOKS, MAGAZINES AND NEWSPAPERS

Books, magazines and newspapers can provide valuable advice and assistance in managing

operational plans. The various governments have bookshops while newsagents and bookshops

stock books and magazines on a variety of business topics including customer service, computers

and accounting.

UNIVERSITIES, TAFES AND OTHER EDUCATIONAL ORGANISATIONS

Assistance from Universities, TAFEs and other educational organisations includes:

 Short courses

 Seminars

 Consulting

 Research and development

 Facilities for businesses in the start-up phase, e.g. Premises at cheap rental

COMPUTER HARDWARE AND SOFTWARE ORGANISATIONS

Computer hardware and software organisations can provide assistance in designing, installing,

operating and maintaining computer systems.

BUSINESS ENTERPRISE CENTRES

Business Enterprise Centres are located in city and country areas throughout Australia and

provide free assistance and support through their network of contacts.

The help includes:

 Referral to specialist advisors, e.g. Lawyers

 Assistance through the maze of government departments

 Advice and support for innovations and inventions

 Problem solving

 Business planning

 Market research

 Advice on regulations and licensing

 Advice on finance

 Advice on exporting

UNDERSTANDING ADVICE AND TAKING ACTION

It is necessary to determine which source of help and information is likely to be beneficial and to

be careful about the following types of issues:

 Information overload making it difficult to identify the real issue

 Information not clear

 Information misinterpreted

 Information not available when needed

 Information not fully researched/incomplete

 Bad or inappropriate advice

 Too much optimism or pessimism

 Getting bogged down in detail

 Advisors' knowledge of the industry

 Qualifications of advisors

 Fees

Misinterpreting advice may lead to inappropriate decisions, e.g. if market research does not use a

sufficient sample to predict overall view. Failing to take appropriate action is also an issue, e.g.

studies may show that a possible business location is a poor site because of the lack of parking

but this may be ignored instead of trying to solve the matter.

NEGOT IATE RE COMMENDA T IONS FOR VARIAT IONS TO

OPERAT IONAL PLANS AN D GAIN APPROVAL FROM

DESIGNATED P ERSONS/G ROUP S

VARIATIONS TO OPERAT IONAL PLANS

The nature of planning and business guarantees that you will have to make changes to any

reasonably long term plan over the course of its implementation. Variance is the term that is used

to describe what happens when performance results differ from the performance that was

expected. Variances can be either favourable or unfavourable. If you are responsible for

identifying a deviation in the budget, then you will need to investigate and report on why it has

occurred. In those cases where the variances are negative, you may be asked to take corrective

action to address the variance.

There is a range of issues that can impact on resource costs and can have an effect your work

areas' ability to stick to the budget.

These issues may include:

 Higher costs of staff during skills shortage

 Implementation of new technology

 Staff recruitment

 Seasonal conditions that affect price

 Suppliers increasing their prices

 Unexpected rush orders or problems with scheduling

 Using substitute or substandard materials

It is essential that stakeholders, in particular your senior manager and any teams, departments,

organisations or individuals affected by any variation in your plan, need to be advised as soon as

possible of any variance that is to be implemented.

DEVELOP AND IM PLEMENT SYSTEMS TO E NSURE THAT

PROCEDU RES AND RE COR DS AS SOCIATED WITH

DOCUMENT ING PERFORMA NCE ARE MANAGE D IN

ACCORDANCE WITH ORGA NIS ATIONAL REQU IREME NTS

SYSTEMS TO DOCUMENT PERFORMANCE

Policies and procedures are documents that detail the overall processes, rules, and guidelines that

an organisation follows which show how it performs its operations and the laws that it must

follow.

Policies show what the organisational objectives and the recommended actions when operating

in various areas are, as well as the general industry guidelines that must be followed by the

organisation.

Some rules in regard to policies include:

 They should be clear and easy to understand

 They should be translated into real practices

 They should be flexible

 They should be based on sound judgement

 They should not describe procedures

 They should conform to the law and other regulations

Procedures are effectively the guides for the organisation of the methods that are used to

perform the daily, routine tasks and jobs. They can also be used as a training guide for new

employees as they detail how to perform the basic tasks.

Policies deal with what is to be done while procedures indicate how it is to be done. An

organisation may have policies and procedures for a multitude of aspects such as:

 Sales and marketing

 Quality

 Production

 Purchasing

 Administration

 Maintenance

 Accounting

 Finance

 Human resources

Each of these policies and procedures areas can then be broken down further.

Written policies and procedures can be kept in bound manuals with appropriate reference titles

and numbers.

By doing this, it will assist you in the management of operational plans by:

 Providing you with a reference point to decide on how to treat particular issues

 Providing a reference point for staff training

 Ensuring a standard approach is adopted throughout the organisation

 Acting as a best practice tool to show that the organisation is complying with

legislation and other requirements

The following are the matters which could be included in a procedure manual for a business.

 Introduction

 Outline of this manual

 Key terms used

 Operations staff

 Responsibility of manager

 Presenting to the customer

 Uniform/work wear

 Grooming

Internal control is an aspect which greatly impacts on how operational plans are managed and

implemented within an organisation. Internal control comprises of several elements including:

THE CONTROL ENVIRONM ENT

The control environment will include things like:

 The attitude to risk of the managers

 Authority assignment

 Roles of the board of directors and audit committee

 External influence from regulatory authorities

THE MANAGEMENT INFOR MATION SYSTEM

The management information system is concerned with:

 Identifying, assembling and recording all valid transactions and data as required

 Classifying, summarising and reporting information on a timely basis to all relevant

parties

THE CONTROL PROCEDUR ES

 The control procedures are what impact directly on the management of day to day

operational plans and may include:

 Delegating the authorising, recording, and custody aspects to different employees

 Having proper authorisation boundaries

 Maintaining proper documentation and records

 Controlling access to assets, documents, and records to eliminate unauthorised use,

removal or destruction of them

 Carrying out reconciliations

 Having internal audits/checks

All organisations are dependent on a variety of systems which will assist in the day to day

operations, so it is important that the appropriate systems for the particular business are

implemented. These systems may include:

 Computer systems

 Accounting systems

 Payroll systems

 Communication systems

 Point of sale systems

 Cleaning systems

 Catering systems

 Heating, lighting and watering systems

 Maintenance systems

 Stock control systems

 Transport systems

 Production systems

S U M M A R Y

Now that you have completed this unit you should have the skills and knowledge required to

develop and monitor implementation of the operational plan to provide efficient and effective

workplace practices within the organisation's productivity and profitability plans.

If you have any questions about this resource, please contact your trainer. They will be only too

happy to assist you when required.

R E F E R E N C E S

Books

Malouf, Doug 2001, How to sell stacks and stacks of anything, Business + Publishing,

Warriewood, NSW.

Petty, John Douglass 2000, The Australian Business Toolkit: Practical Tools, Tips & Solutions

on How to Start, Run & Grow Your Own Business, CCH Australia, North Ryde, N.S.W.

Stanley, Philip 2000, How To Read And Understand Balance Sheets And Financial Reports In

The New Millennium, [New] ed., Information Australia, Melbourne.

Wrice, M. 1998, First Steps in Retail Management, Macmillan, South Melbourne.

Stanley, John 1999, Just about Everything a Retail Manager Needs to Know, Plum Press,

Toowong.

https://www.dlsweb.rmit.edu.au/toolbox/leadership/toolbox/op/op_c03.html