chapter 8: management process Flashcards
what are the four key business functions
- operations - focus on strats to improve production processes and to create the ideal factory or office layout
- marketing - determine the appropriate markets for the bus’s products, pricing, product features, promotion and channels of distribution
- finance - responsible for the financial requirements, budget allocation and financial record keeping
- human resources - are concerned with the recruiting, training, employment contracts and separation of employees who are req’d to run bus successfuly
define outsourcing
outsourcing is the use of external sources or buses to undertake bus functions or activities for the bus
how do large vs small buses operate their key bus functions
small buses normally carry out key bus functions by a few employees. tasks will often overlap
large buses who divisions or departments, such as the finance department or the marketing department staffed by many ppl, perform one specific function
what does the operations bus function include
- operation processes
- new product or service design and development
- inventory management
- supply chain management
- quality management
what does the marketing function include
situational analysis
market research
market segmentations and target market
differentiation and positioning
product strategies
pricing methods & strats
promotion
distribution
what does the finance function include
setting financial objectives
sources of finance
financial planning and implementing
preparing anf analysing financial statements
cash flow management
profitability management
what does the HR function include
acquisition
training and development
separation
employee contracts
resolving workplace disputes
define interdependence in terms of the key business functions
refers to the mutual dependence that the key functions have on one another. They key bus functions work best when they overlap, and employees work towards common goals. For each function are to perform at capacity, it depends on the support of others
they work in a cordinated and collabrative way to acheive bus goals
why is interdependence preferred
provides a unified approach to achieve its objectivies. coordination depends on size and goals
large bus: separated into differetn divisions or departments headed by separate managers cos they all require different skills and knowledge (speciallist)
what is division in a bus
division refers to the separation of key bus functions into specialised units or departments (coordination becomes an issue)
define operations and operations management
operation refers to the bus processes that involve transformations or more generally ‘production’ (manufacturing / sevirces)
operations management consists of all the activities in which managers engage to produce a good or sevrice (concerned with creating, operating and controlling a transformational process)
how would operation sdirectly influence a bus’s competitive position
- estbalish the lvl of quality
- influence overall cost of production
- determine whether sufficient products meet demand
define tangible and intangible products
tangible: can touch
intangible: cant touch
most modern buses produce a combo of both manufactured goods and sevrices eg internet service
what are the three key elements of the production process
inputs, outputs and processes
define inputs
inputs are the resources used in the transformation process
define transformed reosurces
inputs that are changed or converted in the oeprations process. These include:
- materials
- info: knwoledge gained from research
- customers: become transformed resources when their choices influence inputs
define transforming resources
inputs that carry out the transformation process. They enable the change and value adding to occur eg human resources (employees) and facilities (plant or office) & machinery
how does the transformation process of a manufacturing bus differ from a services bus
- outputs of the service cannot be physically held in stock
- service busses rely heavily on interaction with the customer in determining output
- service bus are more labour-intenseive
deifne outputs
refers to the end result of a bus’s efforts - the good or service
define quality management
the strat which abusiness uses to make sure that its product meets customer expectations. Three quality approaches are quality control, qualilty assurance and total quality management
define quality
the degree of excellence of goods or services and their fitness for a stated purpose
should be:
easy to use, durable, reliable, well designed, delivered on time, after sales services and agreeable appearance
what are the benefits of quality managemtn
- reduced waste and defects
- reduce variance in final output
- strengthened competitibe position
improved reputation and customer satisfaction - reduced costs
- increased productivity
what are the main quality management strategies
quality control, quality assurance and quality improvement
define quality control
involves use of inspections at various points to check for problems and defects (minimised error and waste)
(IDENTIFY)
must meet establish specifications/benchmarks
define quality insurance
involves the use of a system so that bus acheives set standards in production (proactive approach to quality management that aims to prevent defects or problems from occurring
(PREVENTATIVE)
series of quality certifications called “ISO(international org for standardisation) 9000” is a widely used international standard - voluntary
bus comply with this to remain competitive locally and internationally adopting ISO’s guidlined to etablish quality assurnace systems (specific procedures, controls, and recording & documentation measures)
an effective quality management system fives assurnace to customers that bus provides safe and reliable products
what are the two aspects of quality improvement
total quality management and continuous improvement
define total qaulity manaegment
total quality management (TQM) is a commitment to excellence that emphasises continuous improvement in all aspects of a bus’s operation by sharing responsibility among all members of the bus
what is the aim of TQM
- create a defect-free production process, and maintain a customer focus in operations
- can improve the price competitiveness of a bus
- improve product quality
- attain competitive advantage
achieved thru employee empowerment, continuous improvement and improved customer focus
what are quality circles
quality circles are groups of workers who meet to solve problems relating to quality
- substantial cost savings
what is continuous improvement
process that involves an ongoing commitment to achieving perfection (constant pursuit of perfection)
define marketign
total system interacting activities desinged to plan, price, promote and distribute products to present and potential customers
what is the contemporary market approach
refers to strats that stress the importance of customer orientation based on wants and needs of customers thru relationship marketing ie developing long term, cost-effective relationships with customers
define target market
group of customer with similar characteristics who may purchase the product which buses concentrate their marketing efforts
whatt are the 3 broad approaches when selecting a target market
the mass marketing approach, the market segmentation approach or the niche market approach
outline the mass amrketing appraoch
the seller mass-produces, mass-distributes and mass-promotes one product to all buyers eg ford car
bus develiops single marketing mix and directs it at the entire market this means there is one type of product with little to no variation, one promotional program, one price and one distribution system
outline the market segmentation approach
few buses can sell to entire market therefore must divide the market into distinct segments
aim:better direct marketing strats and increase sales and profits by better understanding and reponding to the desires of target customers
allows bus to:
- use its marketing resources more effciently
- better understand the consumer buying behaviour of the target market
- collect data more effectively and make comparispons within the target market
- refine marketing startegies to influence consumer choice
define primary and secondary target market
primary - most of the marketing resources directed
secondary - usually a smaller, less important market segment
what are niche markets
narrrowly selected target market segment
define marketing strategies and marketing mix
marketing startegies are actions undertaken to achieve the bus’s marketing goals (after bus has establish goal and target market)
marketing mix is refers to the combination of the four elements of marketing - product, place, price an dpromotion (dependent on the products stage in the product life cycle)
features of product (marketing mix -four ps)
bus needs to determine product qulity, design, name, warranty and guarantee, packagin, labelling and exclusive features
not only staisfy customer needs but also provide intangible benefits such as feelings of security, prestige, satisfaction or inlfuence
how is product packaging importsnt
well-designed packaging will give a positive impression of the product and encourage first-time customers to purchase
tasteful oackaging can create an image of luxury, sensuality and exclusiveness
also helps preserve, inform, protect and promote the product
what si the importance of product branding
immportant part of the product development is the brand and associated brand logo (powerful marketing tool)
bus encourage the instant recognition of their brand symbol than brand name eg maccas to reinforce the meaning of the symbol as a positive thing
what are three methods for pricing a product
1.cost-based: a pricing method derived form calculating total cost of producing or purchasing a product and then adding a mark up profit
2. market-based: setting prices according to the interaction b/w lvls of supply and demadn
3. competition- based: choosing a price that is either below, equal or above that of competitors
what is the role and aim of promotion
role of promotion is to inform, persuade and remind customers abt products
aim:
- attarct new customers by raising awareness
- increasing brand loyalty by reinforcing the image of the product
- encourage existing customers to purchase more
what are the main forms of promotion
- personal selling and relationship marketing: personal selling involves the activities of a sales representative directed to a customer
relationship makreting: development of long-term, cost-effective and stron relationships with individual customers - sales pormotion: activities or materials used to attract interest and support eg coupons, free samples
- publicity and public relations: publicity refers to any free news story abt a bus’s products
public relations: activities aimed at creating and maintaining favourable relations b/w customer and bus - advertising: print or electronic mass media used to comm msg abt the product. advertising used ot attract, create demand and comm essential info
what are the main adv of social media advertisign (SMA)
- inexpensive in comparision to traditional markeying methods
- easy to use and monitor
- an effective method of gaining exposure
define place or distribution (marketing mix) and distribution channel
activities that make the product available to customers when and where they want to purchase them
dis channel: way of getting the product to the customer
what are three common traditional channels of distribution
- producer to customer - simplest channel that involves no intermediaries
- producer to retailer to customer - retailer is intermediary who buys from producer to resell to customers often for bulky or perishable goods eg furniture and fruit
- producer to wholesaler to retailer to customer - most common
wat is non-store retailing
retailing activity conducted away from the traditional store. Two of the most rapidly developing methods are:
- e-commerce, which refers to the buygin and selling of goods and services via the internet
- mobile ocmmerce (m-commerce), which refers to the buying and selling of goods thru wireless handheld devices ie ur phone
some background on finance
financial manager are repsonsible for managing cash flow of the bus ie
- anticipating cash expenditure,
- ensuring that enough of the income comes in cash
- ensuring enough money saved for contingencies (unanticipated events that can lead to financial difficulty)
what is accounting
a managerial and administartive tool that involves recording of financial transactions so that a clear summary of cash inflows and outflows can be traced over time eg sales reciepts and invoices
provides info abt financial status cash status, financing, cash flows, profitability and trends in cash flows
this encoruages:
- judicious and prudent financial decision making
- accountability or stewardship
define finance
refers to how a business funds its activities - ie where it gets money to trade
define financial statements and identify the main ones
reports that summarise transactions over a period of time eg cash flow statement, income statements, balance sheets
what are cash flow statements
financial statement that indicates the movement of cash receipts and cash payments resulting from transactions over a period of time
- to assess whether money inflows can match money outflows
define liquidity
refers to the at of cash a bus has access to and how readily it can convert assets to cash so that debt can be paid
- a bus considered liquid if the cash available can meet payments ad they are due
-
why are cash flow statements important
vital for the info of the timing of payments and receipt of income
- help predict future cahs flows and hence make provisions for payments
what is an income statement
aka statement of financial performance (summary of income earned and the expenses incurred over a period of trading)
must have a headin that states period of time over which bus operating for the prupose of the statement
what are th five categories of a incoem statement
- revenue
- COGS
- gross profit
- expenses
- net profit
SBS of income statement
- calculate revenue/operating income
- calculate COGS and gross profit
- gross prof = revneue - COGS
- COGS = opening stpck + purchases - closing stock
(opening stock - value of stock at start pf FY closing is end of FY) - itemise and calculate total expenses
4.calculate the net profit
net profit = gross profit - expenses
what are balance sheets
aka statement of financial position used to keep watch of debt lvls ,equity lvls, compare their overall financial stability and assist w/ financial decisoin making
assets on the left and liabilities on the right
define assets (current, non-current, tangible and intangible)
assets are items of value owned by bus that can be given monetary value
cureent- asses that bus can use up within 12 months ie cash, cash receivable
non-current - expected life of longer than 12 months eg machinery, land
intangible - no physical substance
define liabilities (current and non-current)
items of debt owed to other organisations eg suppliers including loans and mortgages
current - expected to be repaid within 12 motnhs
non-current - long term debt
define owners equity
the funds contributed by the owner(s) to establish and build the bus aka capital
once bus gains profts it can put into target money for particular project, reserves for distribution later or pay the investors back
what is the balance sheet equation
assets = liabilities + owners quity
what si the role of income statement and balance sheet in describing the financial performance of a bus
analysis of income statement reveal effectiveness of bus’s planning policies concerning pricing, sales, discounts, valuation of stock and effectiveness of funds contributed by owners
analysis of balance sheet can reveal whether:
- bus has enough assets to cover debts
- any money borrowed can be repaid
- assets of bus being used to maximise profits
- the owners of the bus are making good return on investment
define business ethics
applocation of moral standards to business behaviour; act honestly and morally
buses honour commitments, not engage in midleading behaviour and provide a safe working enviro. However some buses think the cost outwiegh the benefits –> deterioration of bus’s reputations and face consumer boycotts
what are the 3 bottom lines of the triple bottom line
- the profit bottom line: measures of the traditional ‘profit and loss’ financial bottom line
- the people bottom line: measure of how ssocially responsible bus has been
- the planet bottom line: meausre of how sustainble and environmentally responsible bus has been
important for bus to have high personal and ethical standrads so employees perceive the importance of ethical considerations
what are some ethical issues for buses
- fairness and honesty: society expects bus to tell the truth and avoid using misleading or deceptive conduct
- respect for ppl: a bus that treats their staff with respect would expect employees to act ethically
- conflict of interest: when person takes adv of situation or piece of info for their own gain rather than for employer’s interest –> corruption undermines the integrity of bus and if unchecked infiltrates the workplace culture
- financial management: bsu should meet shareholder interest and regularly audit (check accuracy) or financial records –> guard against unnecessary waste, inefficient use of resources, misuse of fund, fraud and theft
- truthul comms: false or miselading ads
what is a strategy that can be implemented to encourage ethical behaviour
devise a corporate code of conduct - set of ethical standards for manager and employees to abide by
