Answers

ACCA Certified Accounting Technician Examination – Paper T5

Managing People and Systems December 2008 Answers

1 (a) Within any organisation, the departments, sections and individuals must all be organised in such a way so as to ensure that
the overall strategic objectives of the organisation are attained and that each department, section and individual makes a
contribution. It is essential that the efforts of each contributor are coordinated to ensure that objectives are met. The function
of an organisation i.e. attaining a strategic objective, is operated via the attainment of contributory objectives by departments,
sections and individuals. This is why efforts at all levels must be coordinated. As the business plan will cover all departments
of the organisation, so all of the departmental plans and budgets must be coordinated, so that they are all working together
to achieve the business plan. For example, sales should be planning to sell the number of units which the production
departments agreed to produce otherwise there will be either unsold stock or unfulfilled orders. Functional plans cannot
proceed without regard for those of other functions. There must be coordination between them and an integration of all
towards successful performance. At the production level for example, coordination will ensure that:
(i) departments know what it is they need to achieve and when;
(ii) work flows from one department to another without hold-ups or clashes and without idle time or overwork for staff or
machinery;
(iii) the resources required for a task are available where and when they are required;
(iv) there is no duplication of effort.
Each department will have its own set of priorities but effective coordination may cause some of these to change in the
interests of pursuing an overall set of priorities.

(b) Human resource planning can be described as a strategy for the acquisition, utilisation, improvement and retention of an
organisation’s human resources. The four main stages are auditing, forecasting, planning and controlling resources. The
auditing stage involves the analysis of the strategic environment (trends in population growth, education, pensions etc) in the
light of the organisation’s strategic objectives. The strategy chosen will have implications for the numbers of employees and
the mix of skills required. The forecasting stage analyses the demand for, and supply of, labour in terms of number, type and
quality of people that the organisation should employ to meet planned requirements and cover expected turnover. The
planning stage involves policies to recruit, train and develop the labour force indicated in the forecast. The controlling stage
involves measuring the effective use of the human resources and their contribution towards the achievement of the
organisation’s objectives.
In addition to auditing, forecasting, planning and controlling resources – the following aspects of human resource planning
can also be important: recruiting, training and development, promotion planning and also retention and succession planning.

2 (a) Managers can assess the significance of information by monitoring and measuring against some baseline and most
management reports are made more meaningful by the use of comparison. (Three only required)
(i) Comparisons with previous periods. The most common comparison of a previous period is of one year’s final figures
against the previous year’s. A business’s statutory financial accounts contain comparative figures for the previous year
as well as the figures for the actual year. Some companies’ financial accounts contain figures for the last five years.
Comparing the figures for five years may be more valuable than comparing the figures for two years, as long term trends
become more apparent over five years. If the comparison is only over two years, one or other year might be unusual for
various reasons and this will distort the comparison. For management accounting purposes year-on-year comparisons
are insufficient by themselves; management will wish to pick up problems a lot sooner than the end of the financial year.
Hence comparisons are often made for management accounting purposes month-by-month or quarter-by-quarter.
(ii) Comparisons with corresponding periods. Making comparisons month-by-month or quarter-by-quarter is most useful
when you expect figures to be reasonably even over time. However, demand for many products fluctuates season-by-
season. In this case, the most useful comparison would be to compare with the same season last year. This is the
corresponding period.
(iii) Comparison with forecasts. Businesses make forecasts for a number of purposes. A very common type of forecasting is
a cash flow forecast. The purpose of making this forecast is for the business to be able to see how likely it is to have
problems maintaining a positive cash balance. If the cash balance becomes negative, the business will have to obtain
a loan or overdraft which will involve interest costs. At the end of the period, management will compare the actual figures
with the forecast figures and try to assess why they differ. Differences are likely to be a sign that some of the assumptions
made when drawing up the original forecast were incorrect and so when making forecasts for future periods
management may wish to change the assumptions that are made.
(iv) Comparisons with budgets. A budget is an organisation’s plan for a forthcoming period, expressed in monetary terms.
Budgets can be used to check that the plan is working by comparing the planned results for the day, week, month or
year to date with the actual results.
(v) Comparisons within organisations. Organisations may also wish to compare the performance of different departments,
sales regions or product type.
(vi) Comparisons with other organisations. An obvious way of assessing how a business is performing in its chosen market
is to compare its results and financial position with those of its main competitors. The main information that will be
generally available will be the competitor’s annual statutory financial accounts. Comparisons are generally made on an
annual basis.

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 (b) You might expect the following to be included in a production and material control report:
(i) Forward loading plans for production cycles, both forecast and actual.
(ii) Machine capacity forecast and actual.
(iii) Departmental operating statements.
(iv) Stock and work-in-progress reports.
(v) Wastage reports.
(vi) Labour utilisation report, both forecast and actual.
You might expect to see the following in a marketing and distribution report:
(i) Market surveys.
(ii) Order reports by product and geographical area, both forecast and actual.
(iii) Discount trends.
(iv) Transport and warehouse cost statements, both budgeted and actual.
(v) Sales personnel performance, both forecast and actual.
(vi) Product service and support costs, both forecast and actual.

3 (a) Douglas McGregor put forward two suppositions that US managers appeared to subscribe to about human nature and
behaviour at work. He argued that the style of management adopted is a function of the manager’s attitudes towards people
and assumptions about human nature and behaviour. The two suppositions are called Theory X and Theory Y and are based
on opposing assumptions about people and work. Theory X represents the ‘carrot and stick’ assumptions believing that the
average human being has an inherent dislike of work and will avoid it if possible. He or she also prefers to be directed, wishes
to avoid responsibility, has relatively little ambition and wants security above all. Because of the human characteristic of
disliking work, most people must be coerced, controlled, directed and/or threatened with punishment to get them to put in
adequate effort towards the achievement of organisational objectives. Managers who operate according to these assumptions
will tend to supervise closely, apply detailed rules and controls and use ‘carrot and stick’ motivations. At the other end of the
extreme to Theory X is Theory Y. The central principle of Theory Y is the integration of individual and organisational goals.
Theory Y suggests that physical and mental effort in work is as natural as play or rest. The average human being does not
inherently dislike work, which can be a source of satisfaction. External control and the threat of punishment are not the only
means of bringing about effort towards organisational objectives. People can exercise self-direction and self-control to achieve
objectives to which they are committed. Theory Y also assumes that the average human being learns, under proper
conditions, not only to accept, but also to seek responsibility. Avoidance of responsibility, emphasis on security and low
ambition are the results of experience and are not inherent in human nature. Under conditions of modern industrial life, the
intellectual potential of the average human being is only partially utilised. McGregor was of the view that Theory Y
assumptions provided a better explanation of human nature and indicated the need for a different managerial strategy in
dealing with people if they were to be correctly motivated. Managers who hold Theory Y assumptions about people are likely
to be more democratic and consultative. Both Theory X and Theory Y are intended to be extreme sets of assumptions – not
descriptions of actual types of people. However, they also tend to be self-fulfilling prophecies since people tend to behave in
the way expected of them.

(b) William Ouchi provided a comparison of management style and practice in different cultural settings. Profiling American
management culture as Theory A and typical Japanese management as Theory J, he sought to synthesise the two to propose
a form of Japanese-style management that could be applied successfully in a Western context. Ouchi called these methods
Theory Z. The characteristics of a Theory Z organisation are as follows (three only required):
(i) Long-term employment – not necessarily lifetime, but longer than the average in American and European companies.
(ii) Slow-progressing managerial career paths (as in the Japanese system, but with a more Western specialisation of skills).
(iii) Moderately specialised careers – which may not change.
(iv) Collective consensus decision-making processes (Japanese), but with individual retention of ultimate responsibility for
defined areas of accountability (Western).
(v) Industrial relations characterised by trust, co-operation and mutual adjustment.
(vi) Concern for the employee – close to the paternalistic attitudes of the old Quaker companies in the UK, such as
Cadbury’s.
(vii) Implicit informal controls (such as guiding values) alongside explicit, formal controls.

4 (a) All levels of management are involved in work planning. At the top level, decisions are made on what to do, and as you come
down the hierarchy the plan is developed to incorporate how it is to be done, when and by whom. The basic steps in work
planning for a department include the following:
(i) The establishment of departmental priorities, for example making decisions around which tasks and activities are
important and/or urgent.
(ii) Scheduling or timetabling tasks and allocating them to different individuals within appropriate timescales (e.g.
continuous routine work and arrangements for priority work with short-term deadlines), to achieve work deadlines and
attain departmental goals.
(iii) Coordinating individual tasks within the duties of single employees or within the activities of groups or individuals so
that both individuals and teams can work as effectively as possible within a department.

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 (iv) Establishing checks and controls to ensure that priority deadlines are being met and that work is not falling behind, and
that routine tasks are achieving their objectives.
(v) Agreeing the mechanism and means to reschedule ordinary work within the department to facilitate and accommodate
new, additional or emergency work by drawing up contingency plans for unscheduled events.

(b) Personal work planning aids include lists and checklists, bar charts, precedence networks, action plans, timetables, diaries,
and personal organisers. (Four only required)
(i) Lists. Lists are a useful way of identifying and remembering what needs to be done and of monitoring how you have got
on. Lists can be used to plan a coming week and can also be generated on a daily basis. You can prioritise items on a
list in order of priority or in an order in which you intend to deal with the items on the list. Lists can help to keep you
focused if you stick to what is on the list and don’t do anything that is not on your list for the day/week. At the end of
each day/week it can be useful to take all of the items on the list and transfer them to the list for the following day/week.
The physical act of writing tasks down on paper is an important part of the process and helps fix them in your mind.
(ii) A checklist is a particular type of list that allows ticking or checking off each task as it is completed. Checklists can be
helpful if you need to indicate when you start and finish an activity, or even for the stages of an activity (for example
where a particular document is at a given date) – or elements of all of these.
(iii) Bar charts. A bar chart has two main purposes: firstly to show the time needed for a personal work activity, and secondly
to display the time relationship between one activity and another. Bar charts can be especially useful for checking the
time schedules for a number of individual activities that are interdependent. A bar chart can show the overall progress
of a project or a piece of work to date, thus assisting in monitoring the progress attained at an individual stage of a multi-
stage process.
(iv) Precedence networks or time schedules. These are helpful if you are having difficulty converting your list or checklist
into a workable sequence of personal actions. A simple precedence network shows which activities need to be completed
before others. A major advantage of this approach is that it allows you to show when a number of activities need to be
done at roughly the same time.
(v) Timetables and diaries. These are useful to remind you of key times and dates, to remind you to undertake advance
preparations or follow up actions and to help you to allocate and coordinate your time effectively.
(vi) Personal organisers (including electronic ones) are often a combination of timetables and diaries with additional features
such as the ability to store contact details, notepad and file management facilities.
(vii) Software packages such as Microsoft Project and Outlook, which ease the task of planning by enabling changes, updates
and projections to be produced quickly. Once data has been entered, bar charts, networks and reports can be produced.

5 (a) There will be several elements to a health and safety policy, whatever the specific needs and hazards of a particular
workplace. Some of the key components are as follows (five only required):
(i) Risk assessment. This is part of continuing risk management and includes:
(a) Identifying risks,
(b) Controlling risks,
(c) Sharing information,
(d) Providing training as appropriate.
(ii) Having appropriate systems and procedures. This will include having safety procedures, procedures for the reporting of
incidents, the removal of hazards and appropriate checking procedures. Emergency and evacuation procedures may also
be included.
(iii) Minimising hazards associated with equipment. This will include the provision of any protective clothing, ergonomic
design of work areas, soundproofing, safety equipment and appropriate maintenance of machinery and equipment.
(iv) The provision of information. This includes any warning signs, instructions about location and use of fire extinguishers,
updating safety manuals and ensuring that everyone is aware of their location.
(v) Training provision. This includes training in safety procedures and the use of equipment. It includes induction training,
training when moving to a different department and regular updates on any new policies or information.
(vi) Responsibilities. This includes employee duties and the appointment of health and safety officers and representatives.
(vii) On-going monitoring to ensure policies and procedures are being adhered to. Making changes to systems and procedures
as appropriate.

(b) The typical steps that a health and safety manager might take in order to ensure on-going risk management are as follows:
(i) Carry out a risk assessment, generally in writing, of all work hazards on a continuous basis.
(ii) Introduce controls to avoid/reduce risks and plan contingency measures to minimise impact.
(iii) Assess the risks to anyone else affected by their work activities (such as suppliers, customers or visitors).
(iv) Share hazard and risk information with other employers, including those on adjoining premises, other site occupiers and
all subcontractors coming on to the premises.

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(v) Revise safety policies in the light of the above – or initiate safety policies if none were in place previously.
(vi) Identify employees who are especially at risk (such as pregnant women or night shift workers).
(vii) Provide up-to-date and appropriate training in safety matters.
(viii) Provide information to employees (including part-time and temporary workers) about health and safety.
(ix) Employ/appoint competent health and safety advisors in all key areas.

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ACCA Certified Accounting Technician Examination – Paper T5
Managing People and Systems December 2008 Marking Scheme

1 (a) 12 marks for a full explanation to include reference to meeting overall strategic objectives and departmental objectives,
resource issues, workflows and avoidance of duplication of effort. 12 marks

(b) 2 marks for each of the stages (or aspects) identified and explained – in the context of planning – up to a maximum of
8 marks. 1 mark only to be awarded for a stage (or aspect) which is identified, but not explained in the context of planning.
8 marks

Total 20 marks

2 (a) 4 marks for each type of comparison (maximum of three types) explained, up to a maximum of 12 marks. 1 mark only per
type to be awarded if there is no explanation. 12 marks

(b) 2 marks for each item outlined, up to a maximum of 8 marks. 8 marks

Total 20 marks

3 (a) 5 marks for a full discussion of Theory X. 5 marks for a full discussion of Theory Y. 2 further marks for reference to
management style, self-fulfilling prophecy, implications etc. 12 marks

(b) 2 marks for a brief explanation which includes reference to the different cultural settings. 2 marks for each characteristic given,
up to a maximum of 6 marks. 8 marks

Total 20 marks

4 (a) 2 marks for each step described up to a maximum of 8 marks. Only 1 mark to be awarded if no description is offered.
OR 1 mark for each step identified up to a maximum of 8 marks. 8 marks

(b) 3 marks for each planning aid explained, up to a maximum of 12 marks. Only 1 mark to be awarded per aid if the planning
aid is just identified or listed with no explanation. 12 marks

Total 20 marks

5 (a) 2 marks for each component explained, up to a maximum of 10 marks. 1 mark only to be awarded if a component is listed
but not explained. 10 marks

(b) 1 mark for each step listed up to a maximum of 9 and 1 further mark for listing them in a sensible order. 10 marks

Total 20 marks