Lesson 5: Management and the Business Functions

Question 1

Entities involved in transforming resources to products or services, offering it to
customers, in order to address their needs, profitably.

Answer 1

Business

Question 2

Functional Areas of Business

Answer 2

● Financial Management
● Production Management
● Marketing Management
● Personnel Management

Question 3

Acquisition, management & financing resources
Primarily concerned with investment and financing decisions

Answer 3

Financial Management

Question 4

o Preparation of long-range plans and
budgets for major investments. E.g.
plant expansion
o Determination of the total amount of
assets held by the firm, the composition of these assets, business
risk complexion of the firm

Answer 4

Investment Decisions

Question 5

o Determination of the financing mix and
sources appropriate for the requirements
of the firm. E.g.
o Answers the following questions:
- When to issue stocks?
- Stocks or bonds?
- When to borrow?
- Short-term or long-term?

Answer 5

Financing Decisions

Question 6

Covers production planning, production process, and quality control

Answer 6

Production Management

Question 7

• Quantity needed
• Forecasting
  -Machines/Equipment/People needed
• Layout
• Location
• Monitoring

Answer 7

Production planning

Question 8

• Queuing
• Capacity
• Reliability
• Quality control

Answer 8

Production process

Question 9

determines the operations to be performed and their sequence

Answer 9

Routing

Question 10

function of assigning work to a machine or department

Answer 10

Loading

Question 11

determines the time at which each operation is to take place

Answer 11

Scheduling

Question 12

authorizes the actual start of operations

Answer 12

Dispatching

Question 13

monitors the execution of plans

Answer 13

Expediting

Question 14

process of ensuring that products meet quality specifications

Answer 14

Quality control

Question 15

involve the determination of bonuses for meeting or exceeding production targets, the basis
for payment of compensation and the penalties for poor performance, e.g. defective or
rejected outputs

Answer 15

Wage incentive systems

Question 16

deals with components of different marketing system e.g. competitors, suppliers and buyers

Answer 16

Analyzing marketing opportunities

Question 16

product development, product phase-out, product planned obsolescence

Answer 16

Formulating product strategies

Question 17

an operating plan that focuses on the product mix, prices, promotions and channels of
distribution with a timetable for each activity

Answer 17

Planning marketing programs

Question 18

evaluation of product performance, performance of marketing sales and personnel,
determination of bonuses if targets are met or exceeded

Answer 18

Administration of marketing program

Question 19

• attracting, developing, maintaining human resource
• Administration of employee benefits
• Recruitment process
• Performance evaluation of employees
• Orientation of new employees on company policies, personnel policies, company history
• Maintenance of personnel records

Answer 19

Personnel Management