Chapter 13: Business planning and functional strategies Flashcards
What is the human resource cycle? (Devanna)
Human resource management strategies must consider the various stages of human resource management.
Selection feeds into actual performance which feeds into appraisal which feeds into rewards and training
Rewards feeds back into actual performance and training feeds back round to selection
What are some individual human resource plans to be included in HR planning?
- Recruitment plan: This considers the balance between the forecast supply and demand of human resources
- Training plan: This ensures that skills remain up-to-date, relevant and comparable with the best in the industry
- Productivity plan: This sets out how productivity will be improved and how performance will be measured
- Redevelopment plan: This considers how staff can be retrained and transferred internally, including succession planning
What is product research and process research?
Product research: Focusing on the development of new products or adaptations to existing products
Process research: Focusing on how goods/services are produced, to improve efficiency and quality
What is innovation planning?
Innovation is concerned with the generation of new ideas of how to do business. It is primarily a creative activity.
Generating and maintaining a creative environment involves the following aspect:
- Leadership: setting and communicating a vision which encourages new ideas
- Culture: nurturing a creative culture which views failure as a learning process
- People: adopting a team-based approach that encourages participation
- Structure: embracing working methods and flexible organisational structures
- Communication: greater openness in communication and sharing of ideas
What are the key factors to consider when looking at operations?
Operations involve the transformational process of changing inputs into outputs in order to add value.
- Volume: Higher volumes of production may lead to more capital-intensive, automated production processes and division of labour
- Variety: Greater variety in operations (e.g., a diverse product range) will reduce the ability to standardise processes and will increase the range of skills required.
- Variety in demand: Variations in the demand for the organisation’s products or services (i.e., due to seasonality) will be a key consideration regarding capacity planning
- Visibility: When an operation is highly visible, the employees will have to show good communication skills and interpersonal skills in dealing with customers
What are the three general approaches to capacity planning?
Made to stock: Operating a constant level of activity will accumulate stock during quiet periods which can be utilised during busy periods
Made to order: Products are made as the customer requires them through the adoption of Just-In-Time production methods
Manipulate demand: Customers are encouraged to switch to off-peak periods by using discrimination pricing to adjust the selling price at different times
What are the ‘just-in-time’ methods?
Just-in-time manufacturing is an approach to planning and control based on the idea that goods or service should be produced only when they are ordered or needed.
This means that goods are only produced when they are needed, eliminating large inventories of materials and finished goods.
Just-in-time purchasing can also be adopted with regards to raw materials and other purchases. This requires close relationships with trusted suppliers.
The supplier subsequently will need to adopt their own flexible productions systems.
What are the two key aspects of quality management?
Prevention: Quality Assurance
Procedures and standards are devised with the aim of minimising defects
Detection: Quality Control
Checking and reviewing work that has been done in order to detect defects
What is Total Quality Management (TQM)?
The continuous improvement in quality, productivity, and effectiveness obtained by establishing management responsibility for processes as well as outputs.
When adopting this approach, all internal processes are treated as internal suppliers or internal customers to each other. Some organisations even create formalised service level agreements between these internal operations.
All parts of the organisation need to work together and a quality culture needs to be adopted across the whole firm.
What is the purchasing mix?
The purchasing manager is responsible for obtaining the best purchasing mix
- Quantity: Sufficient amounts to met future needs
- Quality: To avoid production delays and reputation damage
- Price: Should be negotiated to maximise profit
- Delivery: Reliable and timely delivery to avoid stock-outs
Why are some ethical reasons a supplier may be rejected?
A potential supplier may be rejected, despite being cheaper, due to ethical considerations
- Treatment of employees
- Health and safety
- Environmental protection
- Transparency of contracts
- Fraud and corruption
What are the key factors to consider in supply chain management?
- Responsiveness: Is the supplier capable and flexible enough to be able to supply goods whenever they are required?
- Reliability: Can the supplier consistently meet the organisation’s needs in terms of quality and delivery times?
- Relationships: Long-term relationships with regular suppliers will strengthen trust and improve integration
What are the advantages of a single supplier?
- Strong relationships with supplier
- Better commitment from supplier
- Economies of scale
- Better quality through Quality Assurance programmes
- Better communication
- Confidentiality
What are the advantages of multiple suppliers?
- Reduced supplier power - competition may drive down prices
- Less disruption/spread dependency if problems occur with one supplier
- Access to a wider range of knowledge and expertise
What is the role of the finance function as a business partner?
- Financer function has evolved from a historical reporting role to an important business partner for operational units
Acting as a business partner enables the finance function to:
- Provide ‘real time’ support in data and information needs
- Enable business unit leaders to understand performance and devise strategies to improve
- Help operational leaders put together credible business plans for increased investment, before they go to senior managers
- Collaborate with business unit leaders in preparing budgets
- Help design information systems that meet the needs of operational managers
