3 - Business Functions and methods of production Flashcards
What are the business functions/departments
- Marketing
- Production/operations
- Accounting and finance
- Human Resources
What does the marketing function do
- Advertisement
- Market research
- Customer service, PR
What does operations department do
- Convert raw materials into goods and services (manufacturing)
- In Control of logistics
What does accounting and finance department do
- Record cash flow transactions
- Conduct cash flow forecasts
- Produce financial statements
- Ensure tax is paid correctly
What does Human Resources do
- Recruitment
- Selection
- Hand employee relations eg payroll and training
- Redundancies
How could business size be measured
- No of employees
- Market share
- Turnover
- Profits
- Value of assets
- Brand/history
How can smaller firms compete with larger ones
USP eg customer service, quality, local materials
What are some of the attractions of international trade
- Gain EOS
- Variety for consumer
- Business growth
What are the 3 trading areas
- Free trade areas
- Customs unions
- Common markets
What are free trade areas
No internal tariffs or quotas
What is a customs union
Has common external tariffs
What is a common market
Has common tariffs and free movement
What is a trading bloc
A group of countries within a particular geographical region that protect themselves from imports from non-members
Examples of difficulties of exporting abroad
- Finding customers
- Market knowledge
- Exchange rates
- Cultural differences
- Trade barriers
What is a multinational
Firm based in one country but operates in many other
Benefits of multinational
- Access to more customers
- avoid tax
- EOS
Disadvantages of multinational
- Diseconomies of scale
- Cultural differences
- Exchange rates
What is meant by globalisation
Increased integration and interdependence of national economies
Factors affecting globalisation
- Trade blocs
- Growth of emerging markets
- Improvements in infrastructure, transport, communication, technology
Joint venture definition
Where 2 or more firms share resources and expertise to achieve a particular good, risks and rewards are shared
Eg BMW and brilliance
Advantages of joint venture
- Spread risk
- Move into new markets
- Growth
Limitations of joint ventures
- Share rewards
- Difficultly In co-ordinating it
What is a strategic alliance
An arrangement between 2 companies that have decided to share resources to undertake a mutually beneficial project
How is a strategic alliance different to a joint venture
It is less permanent
What is operations/productions
The functional area responsible for turning inputs into outputs as efficiently as possible
What are operations department responsible for
- Quality Control
- Packaging
- Logistics
Possible objectives of operations department
- Break even
- Increase profit margins
- Increase output
- Improve quality
What factors should be considered when setting production objectives
- Type and size of business
- Conflicting objectives
- Economic position
- Competition
- Law and legislation
What is adding value
An improvement or addition to a product or service that makes it worth more
An example of adding value
Branding
What are the 3 methods of production
Job
Batch
Flow/mass
What is job production
Making a unique product to customers order
What is batch production
Making a specific quantity of products
What is mass/flow production
Making large quantities of the same product
Advantages of job production
- High quality, so high prices
- Motivation for workers
Disadvantages of job production
- Time consuming
- High costs
- High pressure
Advantages of batch production
- Produce range of products in large quantities
- Skilled labour (efficiency)
Disadvantages of batch
- Downtime reduces production
- High training and wage costs due to range of products
Advantages of flow production
- EOS
- Low labour costs
Disadvantages of flow
- Boring
- Technology problems haunt production
What is specialisation
Where a firm, employee or country focuses on production of a particular product or small range of products
What is meant by division of labour
Splitting up the production process into individual parts, allowing specialisation in each
Advantages of specialisation and division of labour
- Efficiency
- No time wasted on production process
Disadvantages of specialisation and division of labour
- Boredom
- Hard to replace /train staff
What is cell production
Where a production line is split into a number of self-contained units
What is meant by customer service
The interaction between customer and business
