1.2 Influences on operations Flashcards
What are the 7 influences on operations?
- globalisation
- technology
- quality expectations
- cost-based competition
- government policies
- legal regulation
- environmental sustainability
How does implementing globalisation influence the operatinal process of a business?
advantage: increases access to new markets -> increased consumers and outsourcing
disadvantage: increased competition
How does implementing technology influence the operatinal process of a business?
technology is used to optimised the operations processes in a business
advantage: increases efficiency
disadvantage: high initial input
Why is it important for a business to meet quality expectations?
quality expectations is a minimum requirement for how well a product is designed
meeting quality expectations ensures customers are satisfied with the product, creating repeat sales and increasing competetive advantage and goodwill
What is cost based competition?
when the cost of a product is reduced through determining break-even points (where the firm matches total costs and total revenue) and implementing cost advanatges
achieve:
* high volume output
* standardised products
* using automated production systems
* bulk buying
* economies of scale
How does implementing cost based competition influence the operatinal process of a business?
advantage: increased profit retention
disadvantage: may reduce quality
How do government policies influence the operatinal process of a business?
inputs and outputs
government policies influence the inputs and outputs of production
inputs: the government aims to make labour cheaper and more efficient -> businesses are less likley to replace workers with machines
outputs: the government can favour certain industries in subsides -> businesses can priorise production
- taxation rates
- WHS
- environmental policies
How do legal regulation influence the operatinal process of a business?
inputs and outputs
legal regulations the processes businesses take in their transformation process
inputs: restricting the raw materials that are used in production
outputs: increased taxes on more damaging goods like alcohol and minimum safety requirements on goods
Differentiate between legal compliance and ethical responsibility
Legal compliance are regulations that all businesses are supposed to follow, breaking them will charge compliance costs
Ethical responsibility involves demonstrating values beyond money
However, when a business advertises an ethical responsibility, it becomes a legal responsibility to follow through
How does implementing environmental sustainability influence the operatinal process of a business?
advantage: increases goodwill of a business
disadvanatge: increases input costs
What is corporate social responsibility (CSR)?
the social responsibility a company has to its community
