3.1.3 Interdependence with other key business functions

Question 1

Explain the interdependence of finance and operations

Answer 1

A major goal of any business is to create value while the goal of people and institutions that have invested in the business is to receive a return on their investment. Both are financial goals and both have implications for operations. = relationship between production and return on investment Another example is businesses will try to reduce costs as they produce their output. Operations will try to reduce inventories

Question 2

Explain the interdependence of finance and marketing

Answer 2

Marketing is the way most businesses generate sales. By generating sales the business is increasing in value and this helps with the short-term financial goals of managing cash flow. Three important indications highlight the link marketing and finance

• Sales volume and value
• Market share
• Operating income

Question 3

Explain the interdependence of HR and marketing

Answer 3

Human resources is concerned with the acquisition, development, maintenance and separation of the human resources of a business. The HR function also needs to ensure that employees have the right skills, are placed in the right jobs and are paid competitively. Finance is in a key position to help HR achieve its objectives. This is because in many businesses finance is becoming the main source of performance measurement data. The information fiancee gathers on earnings, productivity and customer satisfaction provides tremendous insight into the staffing and development needs of a business. Unless this information is shared with human resources HR cannot do its job.