Operations Influences

Question 1

What are positive influences of globalisation on operations?

Answer 1

• Allows global sourcing of cheaper inputs
• Opportunities to expand to achieve economies of scale

Question 2

What are negative influences of globalisation on operations?

Answer 2

• New competition from overseas
• Ethical issues with some foreign suppliers
• Logistical issues getting inputs delivered from overseas

Question 3

What is the case study for globalisation?

Answer 3

Amazon (global factors in their operations)

Question 4

What is globalisation?

Answer 4

The integration of economies, including increased foreign trade and investment

Question 5

What is cost-based competition?

Answer 5

If a business’ rivals have low costs and prices, the business will need to cut costs to be able to compete

Question 6

What are some ways to respond to cost-based competition?

Answer 6

• Global sourcing of inputs
• Replacing labour with technology
• Outsourcing

… Or other operations strategies that help to reduce costs

Question 7

What is the case study for cost-based competition?

Answer 7

Coles (responding to new foreign competition by investing in automated distribution centres)

Question 8

How does technology influence operations?

Answer 8

• Products may become obsolete (e.g. DVDs)
• Products can be enhanced with technology (e.g. headphones now via bluetooth)
• Help make operations become more efficient (e.g. use robots)

Question 9

What is the case study for technology?

Answer 9

Uber (using smartphone technology to provide a better, cheaper service than taxis)

Question 10

What is the influence of quality expectations?

Answer 10

If customers expect a business to have high quality products (e.g. Apple), the business needs to ensure it meets these expectations to maintain its reputation and customers

Question 11

How can a business respond to quality expectations?

Answer 11

• Quality management (to prevent defects)
• Research and development (to innovate on its products)
• Better quality inputs

… Or any operations strategies that help to improve quality

Question 12

What is the case study for quality expectations?

Answer 12

Coca-Cola (quality management to prevent defects)

Question 13

What are government policies?

Answer 13

The broad goals of what the government is aiming to do, such as how it intends to change the taxes (tax policy) or protect the environment (environmental policy).

Question 14

How do government policies influence operations?

Answer 14

When the government announces a new policy, it might increase the business’ costs (e.g. more environmental protection) or present an opportunity (e.g. more government spending on renewable energy is an opportunity for businesses that produce renewable energy)

Question 15

What are legal regulations?

Answer 15

Specific rules set by the government that businesses must follow.

Question 16

What are some examples of legal regulation in operations?

Answer 16

• Zoning
• Waste disposal
• Work health and safety

Question 17

How do legal regulations influence operations?

Answer 17

Businesses must follow them to avoid penalties (fines).

But following regulations is sometimes expensive too (compliance costs).

Question 18

What is the case study for government policies in operations?

Answer 18

Qantas (border closures, flight subsidies)

Question 19

What is the case study for legal regulations in operations?

Answer 19

Qantas (terrorism/security requirements)

Question 20

What is corporate social responsibility (CSR)?

Answer 20

Going above and beyond the law in consideration of the community and the environment.

Question 21

Why is it important to demonstrate corporate social responsibility in operations?

Answer 21

Businesses want to demonstrate CSR in order to differentiate their products and appeal to customers.

It also builds customer loyalty and helps to attract staff as well.

Question 22

How can a business be environmentally sustainable in its operations?

Answer 22

• Reduce greenhouse gas emissions (e.g. use solar panels)
• Reduce water use
• Use recycled materials

Question 23

How can a business be socially responsible?

Answer 23

• Fair treatment of employees (including those overseas)
• Workplace diversity
• Requirements on the ethics of their suppliers too

Question 24

What is the case study for environmental sustainability?

Answer 24

Unilever (reducing emissions and waste)

Question 25

What is the case study for social responsibility?

Answer 25

Unilever (improving labour standards of suppliers in Vietnam and elsewhere)

Question 26

What is the difference between legal compliance and ethical responsibility?

Answer 26

Legal compliance is required, and will result in fines if you don’t do it.

Ethical responsibility is not required, and businesses choose to do it to appeal to customers.

Question 27

Identify the breadth of government policies that affect operations.

Answer 27

Businesses can be negatively affected or see new opportunities when there are changes in any of these policies:
- Tax policy (e.g. incentive to do tax deductible activities)
- Immigration policy (e.g. how easy you can hire foreign workers on visas)
- Environmental policy (e.g. how you have to protect the environment)
- Trade policy (e.g. are there taxes on imports?)