OPERATIONS: Influences

Question 1

Identify the acronym for the influences and list all of them

Answer 1

LEG, Terry Gul Came Quick & CSR
L - legal regulation
E - environmental sustainability
G - government policies
T - technology
G - globalisation
C - cost-based competition
Q - quality expectations
CSR - corporate social responsibility

Question 2

Identify and describe globalisation

Answer 2

Globalisation refers to the removal of trade barriers between nations. It is characterised by increased integration between countires and exchange of financial resources, labour, technology, expertise.

Question 3

How can globalisation be a threat to a business?

Answer 3

It can act as a threat because businesses that effectively apply cost leadership principles can undercut (offer low prices) the market and dominate in the market.

Question 4

How does globalisation influence operations?

Answer 4

• increases the demand for standardised products that meet global customer’s needs
• enables businesses to achieve economies of scale due to high demand, high production
• enables businesses to outsource globally and save some costs
• different departments of the business can be spread out across different locations

Question 5

What is the relevant case study for GLOBALISATION, OPERATIONS INFLUENCES

Answer 5

Apple products are designed in California in USA, whereas the manufacturing facilities are located in China, Taiwan, Korea, Mongolia, and Europe. Globalisation therefore allows Apple to access more cheaper labour, input materials (earth minerals which are mainly located in China) or advanced technology that is avaliable in just few countries.

Question 6

Explain 3 advantages and disadvantages of globaliation and their effect on operations function

Answer 6

+ Increased exchange of capital, resources, ideas, technology: this allows businesses to gain access to certain materials or cheaper labour that is not avalable in their home country
+ Opportunity to outsource overseas: this decreases the costs associated with operations and also enables the business to focus on their core function
+ Close proximity to suppliers: the business is able to allocate their departments anywhere in the world to reduce to be close to suppliers and reduce costs of logistics

• Increased competition: some competitors might be able to undercut the market faster and dominate by establishing cost leadership
• Outsourcing labour in other countries: this meand reduce in domestic labour which disadvantages local employees and creates a negative publicity
• Reduced flexibility: difficult to maintain customised products with large scale production

Question 7

Define supply chain

Answer 7

Supply chain is a range of suppliers a business has and the nature of its relationship with their suppliers.

Question 8

Define global web

Answer 8

A business’s chosen global network of suppliers which is based on considerations of minimising overall cost, mitigating risk, and ensuring maximum certainty in terms of timing and quality.

Question 9

How do supply chain and global web correlate?

Answer 9

The global web strategy aims to minimize costs by optimizing supplier allocation, strategically positioning departments close to suppliers. A strong supply chain contributes to a robust global web.

Question 10

Define reverse engineering and provide an example

Answer 10

Reverse engineering is a business strategy that takes competitors released products to investigate the materials used and how it is made in order to make own version at lower cost (Chinese Apple Watch Series 9, Chinese Ticket-To-Japan Ticket)

Question 11

What does technology refer to?

Answer 11

Technology refers to a design, construction, application of innovative devices, methods and machinery upon operation processes.

Question 12

Who installed the first moving assembly line for mass-producing an entire automobile and by how much?

Answer 12

Henry Ford installed the first moving assembly line for the mass production of an entire automobile. His innovation reduced the time it took to build a car from more than 12 hours to one hour and 33 minutes.

Question 13

At the administrative level, what is technology used for?

Answer 13

Technology is used for organisation, planning, decision making and control of operations processes.

Question 14

At the processing level, what is technology used for?

Answer 14

Technology is used for manufacturing, logistics, quality management, all aspects of inventory management, supply chain management and sourcing

Question 15

Recall a relevant case study for TECHNOLOGY, OPERATION INFLUENCES

Question 17

What is referred by Quality Expectation?

Answer 17

Quality Expectation is the degree of how well designed, made and functional goods are, and the overall degree of competence with which services are organised and delivered.

Question 18

How do quality expectations shape operations management?

Answer 18

Inputs and outputs

Question 19

Identify the reason inputs shape operations management

Answer 19

Customers force the business to purchase higher quality inputs that are more expensive.

Question 20

Identify the reason outputs shape operations management

Answer 20

Outputs have high expectations which lead to higher quality outputs, so operations tend to focus on quality control

Question 21

What is cost-based competition referred to?

Answer 21

Cost-based competition is referred as a feature of operations management when businesses bring a cost leadership approach to the operations function.

Question 22

Identify how can businesses reduce costs?

Answer 22

1. Achieve economies of scale
2. Bulk buy inputs
3. Eliminate waste
4. Produce standardised products for larger markets
5. Produce high volume output
6. Use automated production systems

Question 23

What is government policies referred to? (Hint. Government = tax)

Answer 23

A set of principles imposed as government regulations, affecting inputs and outputs of the business.

Question 24

How do government policies affect inputs and outputs

Answer 24

Inputs: subsidies and tax breaks could be offered for certain inputs

Outputs: extra taxes could be placed on certain outputs

Question 25

What is referred to by legal regulation? (Hint. Compliance cost)

Answer 25

Legal regulations are the range of laws with which a business must comply are collectively termed ‘compliance’.

Legal regulations involve compliance costs, however businesses that fail to comply with the rules are under the risk of receiving penalties and fines which incur greater costs.

Question 26

What are some key aspects covered by labour management laws and regulations?

Answer 26

Labour regulations (minimum wage, award wage, working hours, breaks, thereleave payments, workers compensation, WH&S, casual loading)

Fair work and anti-discrimination laws (requiring that employees are treated fairly and with respect)

Environment protection (Minimising practices that harm the environment)

Licensing laws (training or certification, zoning, restricted working hours, disclosure restrictions)

Taxation (levies and duties, taxes on profit, superannuation, company tax)

Question 27

What is referred to as environmental sustainability?

Answer 27

Environmental sustainability states that business’s operations should be shaped around practices that consume resources today without compromising access to those resources for future generations.

Question 28

What are the three main aspects to environmental sustainability

Answer 28

Sustainable Use of Renewable Resources:
This aspect emphasises utilising natural resources in a way that allows them to replenish naturally over time, ensuring they are available for future generations.

Reduction in the Use of Non-Renewable Assets:
This aspect involves minimising the consumption of resources that cannot be naturally replenished on a human timescale, such as fossil fuels or certain minerals. This is achieved through conservation efforts, energy efficiency measures, and transitioning to renewable energy sources.

Application of the Precautionary Principle:
This principle dictates that in situations where the potential environmental impacts of an action are uncertain, businesses should take cautious and proactive measures to minimise harm. It involves choosing actions that are least likely to cause significant environmental damage.

Question 29

Define Corporate social responsibility

Answer 29

Corporate Social Responsibility (CSR) expands a business’s goals beyond profit to include service to society and the community.
Involves businesses doing more than what is legally required from them in order to benefit the community, society and the environment
CSR > legal compliance
The aim of many businesses is not only be seen as money grabbers but also contributing to the society

Question 30

What are the advantages and disadvantages of corporate social responsibility

Answer 30

Advantages:
1. Enhanced Reputation
Enhance a company’s public image and reputation, leading to increased goodwill among stakeholders.

2. Customer Loyalty and Trust
   Foster stronger bonds with customers who appreciate businesses that contribute positively to society and the environment.
3. Competitive Advantage
   Sets a company apart from competitors, creating a unique selling proposition and a distinct edge in the market.
4. Innovation and Differentiation
   Fosters a culture of innovation, leading to the development of new products or services that align with sustainability goals.

Disadvantage:
1. Increased Costs
Implementing CSR programs typically requires a financial investment, which can strain the company’s resources in the short term.

Question 31

What is the concept of the triple bottom line in the context of corporate social responsibility?

Answer 31

The triple bottom line refers to the notion that well-managed businesses should not only prioritise profit but also consider the impact of their actions on three key areas:

• profit
• social justice (people)
• environmental protection (planet)

Question 32

What is the difference between legal compliance and ethical responsibility?

Answer 32

Legal compliance involves adhering to government-imposed rules and regulations, with penalties for non-compliance.

Ethical responsibility goes beyond legal requirements, involving voluntary adherence to moral principles and societal values, reflecting a company’s commitment to act based on a sense of right and wrong.

Question 33

What is the difference between environmental sustainability and social responsibility?

Answer 33

Environmental sustainability involves minimising the use of renewable resources, conserving non-renewable resources, and reducing potential environmental harm.

Social responsibility refers to managing the social, environmental, political, and human consequences of business actions, extending beyond profit maximisation to benefit society and the community.

Question 34

Recall the case study with CSR, operations.