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Grade 9 Business and Financial Studies > The 8 Business Functions > Flashcards

The 8 Business Functions Flashcards

1
Q

What 7 things must be right for the PURCHASING function?

A
  1. Best supplier
  2. Right product/service
  3. Right quantity
  4. Right quality
  5. Right place
  6. Right time
  7. Right price
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2
Q

What 3 parts are to the PURCHASING function?

A
  1. Own use
  2. Processing
  3. Resale
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3
Q

Define risk management in the PURCHASING function.

A
  1. Important goal: make best possible PROFIT BY negotiating LOWEST price WITHOUT compromising quality
  2. Place orders: Ensure that delivered, checked for damage & right quantity (quantity & quality control)
  3. Contingency plan: If supplier delivers late due to unforeseen circumstances; e.g. go to supplier that can deliver on short notice
  4. Develop stock control system:
    4.1. Not too much stock (could be stolen or damaged)
    4.2. Not too little stock (unable to supply products to customers- competitors may accommodate
    dissatisfied customers)
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4
Q

What is the 3 steps of the production process?

A

Input -> process -> output

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5
Q

Define automation

A 
ADVANTAGES: 
Fast production Work 24/7/365
Fewer absenteeism /leave
Less wastage
Fewer mistakes
DISADVANTAGES:
Loss of jobs
Machines are
expensive
Maintenance
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6
Q

Why is the production function important in a business?

A
  1. NOT ALL businesses have such a function
    Some businesses only operate in tertiary sector- (where goods& services sold)
  2. Aim is to create VALUE
    Changing raw materials into form that satisfy customer needs & wants
    ALL factors of production (natural resources/land; labour, capital, entrepreneurship) work together to produce goods & services
  3. Automation during production process may save money
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7
Q

Define risk management in the PRODUCTION function.

A
  1. Manufacturing costs low as possible: without compromising quality
    Quality control systems like sampling & inspections put in place to ensure quality is acceptable
  2. Production department need to ensure:
    Produce right quantities of correct products at the right time, place, price customer is willing to pay
    If business fails business loses customers & money
  3. Production & Marketing function meet regularly
    Current product design still in line with customer demands & requirements (customer choices & preferences change all the time)
  4. Technology plays big role in manufacturing process of many business:
    Business need to keep up with changes, developments & trends in technology
    ADVANTAGE: Technology can speed up production process & save costs, without negatively affecting quality
  5. Contingency plan (Plan B) needs to be in place
    For unforeseen circumstances
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8
Q

Name the 4 goals of the FINANCIAL function.

A
  1. Increase profitability
  2. Profit
  3. Solvent
  4. Good cash flow (liquidity)
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9
Q

What are the 2 financial statements?

A

Statement of Comprehensive income

Statement of Financial position

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10
Q

Why is the FINANCIAL function important in a business? Name 3 things.

A
  1. Capital necessary to start business
  2. 2 Financial statements
    Statement of comprehensive income (old income statement)
    Statement of financial position (old Balance sheet)
  3. Statements there to achieve GOALS of financial function
    Maximum profit
    Increase profitability
    Ensure liquidity (cash flow) is good
    Be solvent (assets> liabilities)
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11
Q

Define risk management in the FINANCIAL function.

A
  1. Responsible for developing all budgets
    Marketing & financial function work together to ensure good sales figures, otherwise profit & profitability will be in danger
    Profit & profitability can be negatively influenced by unexpected expenses & due to lack of financial control
  2. Debtors that do not pay is a big risk
    Check customers credit worthiness before granting credit
  3. Businesses take out loans
    Changes in interest rates affect business- make provision
  4. When importing goods, always risk changing exchange rate
  5. Risk of theft needs to be dealt with proactively
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12
Q

What are the 5 acts in the Human Capital function?

A
  1. The Labour Relations Act
  2. The Basic Conditions of Employment Act
  3. The Skills Development Act
  4. Broad Based Black Economic Empowerment
  5. The Occupational Health and Safety Act
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13
Q

Why is the Human Capital function important in a business?

A
  1. Labour very NB factor of production (others capital, natural resources & entrepreneurship)
  2. Business & workers (represented by trade union) negotiates reasonable remuneration (salaries & wages) to ensure acceptable standard of living as well as so the business needs to remain profitable
  3. HR function puts programs in place to ensure workers are happy & motivated, otherwise profitability could suffer
  4. HR responsible for the following:
    - Determining number of workers & type of skills required
    - Recruitment of most suitable people for the jobs
    - Training staff members to increase productivity
    - Keeping employees motivated ->Happy staff members less likely to leave
    - Acknowledging & rewarding employees who go extra mile
    - Retention of personnel
    - Work satisfaction & job security are important concepts for every employee

While HR department ensures all requirements accomplished & ensures that Labour legislation laws adhered to the 5 acts

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14
Q

Define risk management in the Human Capital function.

A
  1. Careful recruitment & selection needs to be done to ensure that right people are hired for posts advertised and that recruits suited to the organizational culture of business
  2. Good relationships need to be established with trade unions to ensure a happy & productive workforce
  3. One of biggest risks faced by the HC department:
    Negotiating regarding remuneration & striking action if employees are unhappy
  4. Employees must have necessary skills otherwise productivity will decline
  5. Employees have to be educated regarding diversity in work place & to respect one another & accept differences, in order to avert conflict
  6. Programs to motivate personnel, as well as prevent high turnover in staff can help limit expenses incurred in additional recruitment, selection & training of new staff members
  7. Business has to keep an eye on any changes in legislation & adapt accordingly to prevent possible fines and even potential labour unrest
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15
Q

What are the 4 policies in the MARKETING function?

A
  1. Product Policy
  2. Price Policy
  3. Place (Distribution)
  4. Promotion Policy
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16
Q

Why is the MARKETING function important in a business?

A
  1. Market Research helps marketing function
    to identify target market, determine which products are in demand, what price consumer’s willing to pay, where the product should be sold and what method of communication should be used to reach the target market
  2. Important tasks of Marketing Function include:
    Creating successful trade mark, continuously remind customers about the brand to ensure that they remain loyal to the trade mark/ brand & that they continue purchasing product (or service)
  3. Communication with the target market should:
    Stop the customer (potential customer) in their tracks & arouse their interest
    Be credible, otherwise the customer will not trust product or business
    Create lasting impression for customers to ensure that they will always remember the trade name
    Ensure that the customer takes action to enquire about product/ service or to buy product
    Build on an integrated advertising campaign (same theme)
    Promote the brand name
17
Q

Define risk management in the MARKETING function.

A
  1. Without clear communication with target market businesses will not be aware of customer’s needs or the target market will not be aware of what products are available
  2. Important to stay with marketing budget
  3. Competitors’ marketing campaigns must be monitored to ensure that business maintains competitive advantage
18
Q

What makes the PUBLC RELATIONS function important in a business?

A

Public Relations concern all activities that influence the opinions of the public, which involves:
- Sustained, long-term interaction between businesses & external interest groups
- Will only be successful if it is done honestly
- Primary goal of Public Relations department is to create & maintain favourable image of business with stakeholders
- Issues handled by Public Relations Department may include following:
Bad publicity following a crisis
Positive situation e.g. Launch of new product or service or New Corporate Social Responsibility (CSR) Program

19
Q

Define risk management in the PUBLIC RELATIONS function in a business.

A

Public relations function must continually monitor events in business to ensure that business does not (knowingly or unknowingly) create situation that could result in negative publicity, e.g. to ensure that suppliers are not involved in unethical business practices

  • Public will often assume that one is automatically as guilty as other & may react negatively towards business, especially if that the supplier is using child labour to manufacture product
  • Many repercussions result from negative publicity & management must ensure that the business’ image is not tainted or damaged
20
Q

Why is the ADMIN function important in a business?

A

Responsible for the collection of all data within the business & its environment
The data’s then processed into information & the information’s stored to make it available to management as & when required
I.e. admin function deals with all record-keeping & paperwork of business

21
Q

Define risk management in the ADMIN function.

A

Must ensure that the business is up to date with administrative records; ensuring that business complies with legislation
Ignorance is no excuse in eyes of the law
Admin department must ensure that all relevant requirements pertaining to the law are met Customers personal details are also kept in by department

22
Q

Name the 10 functions of the GENERAL MANAGEMENT function.

A
  1. Plan
  2. Motivate
  3. Organise
  4. Decision- making
  5. Lead / activate
  6. Disciplinary action
  7. Control
  8. Delegatei
  9. Coordinate
  10. Communicate
23
Q

Define autocratic leader

A

An autocratic leader allows no input from workers & makes all decisions.
An advantage is in certain situations this is only leadership style that will yield required results
E.g. In a crisis quick decisions need to be made- autocratic approach is best
A disadvantage is often lowers worker’s morale (makes them feel worthless) because their opinions seem unimportant

24
Q

Define democratic leader

A

Manager who follows democratic leadership style allows employees to add their input & to be part of the decision-making process
An advantage is there is often a “buy-in” from people involved- because they feel important
A disadvantage is it could contribute to a longer decision-making process when the manager allows input from all staff members

25
Q

Define laissez-faire leader

A

A manager who has laissez-faire approach to leadership believes that he/she must not interfere with execution of the task, however will tell employees what he/she wants to be done/ expectation but will not interfere with completion of task

26
Q

Define situational leader

A

Uses a combination of all leadership & management styles
Manager will adapt their leadership style to the situation at hand
If the situation requires disciplinary action an autocratic style will be adopted
If the employees are artistic & react negatively to structure laissez-faire leadership style will be employed
When the manager considers opinions workers as important & wants to make them part of decision-making process democratic leadership will be used

27
Q

Define risk management in the GENERAL MANAGEMENT function.

A

The top management is responsible for providing direction to everyone through formulation of business’s vision, mission & goals which needs to be communicated to those who have an interest in it
If top management fails to communicate people will not know in which direction business plans to move or how they are expected to perform- this could undermine success of business
Top management must also ensure teamwork & synergy take place between all other business functions because they are interdependent, which means that the performance in one function will have a direct impact on another function, therefore also on the general performance of business
As with the other functions, General Management must follow/ abide by all laws & be ethical in all they do

Grade 9 Business and Financial Studies (6 decks)

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