chapter 8: management process

Question 1

what are the four key business functions

Answer 1

1. operations - focus on strats to improve production processes and to create the ideal factory or office layout
2. marketing - determine the appropriate markets for the bus’s products, pricing, product features, promotion and channels of distribution
3. finance - responsible for the financial requirements, budget allocation and financial record keeping
4. human resources - are concerned with the recruiting, training, employment contracts and separation of employees who are req’d to run bus successfuly

Question 2

define outsourcing

Answer 2

outsourcing is the use of external sources or buses to undertake bus functions or activities for the bus

Question 3

how do large vs small buses operate their key bus functions

Answer 3

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

Question 4

what does the operations bus function include

Answer 4

• operation processes
• new product or service design and development
• inventory management
• supply chain management
• quality management

Question 5

what does the marketing function include

Answer 5

situational analysis
market research
market segmentations and target market
differentiation and positioning
product strategies
pricing methods & strats
promotion
distribution

Question 6

what does the finance function include

Answer 6

setting financial objectives
sources of finance
financial planning and implementing
preparing anf analysing financial statements
cash flow management
profitability management

Question 7

what does the HR function include

Answer 7

acquisition
training and development
separation
employee contracts
resolving workplace disputes

Question 8

define interdependence in terms of the key business functions

Answer 8

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

Question 9

why is interdependence preferred

Answer 9

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)

Question 10

what is division in a bus

Answer 10

division refers to the separation of key bus functions into specialised units or departments (coordination becomes an issue)

Question 11

define operations and operations management

Answer 11

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)

Question 12

how would operation sdirectly influence a bus’s competitive position

Answer 12

• estbalish the lvl of quality
• influence overall cost of production
• determine whether sufficient products meet demand

Question 13

define tangible and intangible products

Answer 13

tangible: can touch
intangible: cant touch

most modern buses produce a combo of both manufactured goods and sevrices eg internet service

Question 14

what are the three key elements of the production process

Answer 14

inputs, outputs and processes

Question 15

define inputs

Answer 15

inputs are the resources used in the transformation process

Question 16

define transformed reosurces

Answer 16

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

Question 17

define transforming resources

Answer 17

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

Question 18

how does the transformation process of a manufacturing bus differ from a services bus

Answer 18

• 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

Question 19

deifne outputs

Answer 19

refers to the end result of a bus’s efforts - the good or service

Question 20

define quality management

Answer 20

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

Question 21

define quality

Answer 21

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

Question 22

what are the benefits of quality managemtn

Answer 22

• reduced waste and defects
• reduce variance in final output
• strengthened competitibe position
  improved reputation and customer satisfaction
• reduced costs
• increased productivity

Question 23

what are the main quality management strategies

Answer 23

quality control, quality assurance and quality improvement

Question 24

define quality control

Answer 24

involves use of inspections at various points to check for problems and defects (minimised error and waste)
(IDENTIFY)
must meet establish specifications/benchmarks

Question 25

define quality insurance

Answer 25

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

Question 26

what are the two aspects of quality improvement

Answer 26

total quality management and continuous improvement

Question 27

define total qaulity manaegment

Answer 27

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

Question 28

what is the aim of TQM

Answer 28

- 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

Question 29

what are quality circles

Answer 29

quality circles are groups of workers who meet to solve problems relating to quality - substantial cost savings

Question 30

what is continuous improvement

Answer 30

process that involves an ongoing commitment to achieving perfection (constant pursuit of perfection)

Question 31

define marketign

Answer 31

total system interacting activities desinged to plan, price, promote and distribute products to present and potential customers

Question 32

what is the contemporary market approach

Answer 32

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

Question 33

define target market

Answer 33

group of customer with similar characteristics who may purchase the product which buses concentrate their marketing efforts

Question 34

whatt are the 3 broad approaches when selecting a target market

Answer 34

the mass marketing approach, the market segmentation approach or the niche market approach

Question 35

outline the mass amrketing appraoch

Answer 35

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

Question 36

outline the market segmentation approach

Answer 36

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

Question 37

define primary and secondary target market

Answer 37

primary - most of the marketing resources directed secondary - usually a smaller, less important market segment

Question 38

what are niche markets

Answer 38

narrrowly selected target market segment

Question 39

define marketing strategies and marketing mix

Answer 39

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)

Question 40

features of product (marketing mix -four ps)

Answer 40

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

Question 41

how is product packaging importsnt

Answer 41

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

Question 42

what si the importance of product branding

Answer 42

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

Question 43

what are three methods for pricing a product

Answer 43

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

Question 44

what is the role and aim of promotion

Answer 44

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

Question 45

what are the main forms of promotion

Answer 45

1. 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 2. sales pormotion: activities or materials used to attract interest and support eg coupons, free samples 3. 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 4. advertising: print or electronic mass media used to comm msg abt the product. advertising used ot attract, create demand and comm essential info

Question 46

what are the main adv of social media advertisign (SMA)

Answer 46

- inexpensive in comparision to traditional markeying methods - easy to use and monitor - an effective method of gaining exposure

Question 47

define place or distribution (marketing mix) and distribution channel

Answer 47

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

Question 48

what are three common traditional channels of distribution

Answer 48

1. producer to customer - simplest channel that involves no intermediaries 2. 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 3. producer to wholesaler to retailer to customer - most common

Question 49

wat is non-store retailing

Answer 49

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

Question 50

some background on finance

Answer 50

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)

Question 51

what is accounting

Answer 51

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

Question 52

define finance

Answer 52

refers to how a business funds its activities - ie where it gets money to trade

Question 53

define financial statements and identify the main ones

Answer 53

reports that summarise transactions over a period of time eg cash flow statement, income statements, balance sheets

Question 54

what are cash flow statements

Answer 54

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

Question 55

define liquidity

Answer 55

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 -

Question 56

why are cash flow statements important

Answer 56

vital for the info of the timing of payments and receipt of income - help predict future cahs flows and hence make provisions for payments

Question 57

what is an income statement

Answer 57

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

Question 58

what are th five categories of a incoem statement

Answer 58

1. revenue 2. COGS 3. gross profit 4. expenses 5. net profit

Question 59

SBS of income statement

Answer 59

1. calculate revenue/operating income 2. 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) 3. itemise and calculate total expenses 4.calculate the net profit net profit = gross profit - expenses

Question 60

what are balance sheets

Answer 60

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

Question 61

define assets (current, non-current, tangible and intangible)

Answer 61

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

Question 62

define liabilities (current and non-current)

Answer 62

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

Question 63

define owners equity

Answer 63

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

Question 64

what is the balance sheet equation

Answer 64

assets = liabilities + owners quity

Question 65

what si the role of income statement and balance sheet in describing the financial performance of a bus

Answer 65

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

Question 66

define business ethics

Answer 66

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

Question 67

what are the 3 bottom lines of the triple bottom line

Answer 67

- 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

Question 68

what are some ethical issues for buses

Answer 68

- 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

Question 69

what is a strategy that can be implemented to encourage ethical behaviour

Answer 69

devise a corporate code of conduct - set of ethical standards for manager and employees to abide by