Business Studies Exam Preparation

Outsourcing- when a business contracts out some business functions.

Business Functions
Operations- Business processes involving transformations/productions.
- Turning raw materials into finished products.
Employee relations- Acquiring, Developing, maintaining, motivation of staff.
Accounting /Finance- Financial transaction data recorded. Easily interpreted.
Marketing- Meeting the needs/wants of people.
Value adding- refers to value added during transformation, expressed in dollar values.
Mission Statement- Is a written statement that state/summarises the vision and values of
the business.
Strategic plan- long-term plan/goal
Operational plan- is short-term plan achievements that lead up to the long-term plan/goal.

Chain of Command- Who is responsible for who.

Functional Structure
- Activities/operations organised according to key functions and geographic factors.
Functional Structure- group similar work groups together.
Geographic structure- the business activities in an area are co-ordinated within one
department, separate from other areas.
Product structures- relies on product strength. Separate divisions for certain types of
products, specialising in product/sales of product.
Consumer structures- Specialise in customer service. Meets the needs of customers.
Division of Labour- refers to how employee responsibilities are organised and the extent
of employee specialisation.
Specialisation
Advantages
Disadvantages
Employees concentrate solely on areas that Employees lose sight of morale in overall
they are the most skilled in. Increases
process.
efficiency.
Fewer training expenses if employees are
Reduces flexibility of production as a few
trained in one task rather than several.
people absent can hold up the whole
production process.
Employees easier to replace at short notice, Loss if motivation in workers if work lacks
as skill level are clearly defined.
variety and challenge.

Span of control- no of people a manager is responsible for as well as the ratio of

managers to subordinates across successive layers in an organisation.
Downsizing- a trend in business to reduce labour, and encourage more flexible skills in
remaining workforce.
Role of Operations
Elaborately Transformed Manufactures (ETMs)- manufactured goods that are highly
processed and valued. Complex due to amount of processing undergone.
Simple transformed manufactures (STMs)- Able to be further processed. Intermediate
goods by nature. Small value added.
Supply chain- a range of suppliers from which the business purchases materials and
resources.
Supplier rationalisation- when a business reduces their no of suppliers through a process.
Reduced suppliers mean that efficiency can be maximised and reliability rewarded.
Supply chain management is an assessment of:-Distance to/from supplier
-Efficiency of delivery
-Stock usage rate
-Quality
-Pricing
-comparisons
General purchasing rule: Not cheapest- but the one that offers the best value for money
eg. Reliable/efficient
Computer integrated manufacture (CIM)
Process that links key business functions into production process.
Material requirements planning anticipates levels of demand and orders supplies of the
required inputs accordingly.
Rostering- timetabling or plan that shows availability of employees and schedules of
work for the business.
Multi skilling- enables employees to develop skills in ongoing training and development.
Schedule- a plan which sets out a sequence of operations allotting start and completion
times.
Scheduling tools PERT analysis and Gantt charts.
Gantt chart
Simple chart dividing a project into a list estimating start completion times for each
activity.
AdvantagesSimple
Plans for the future
Defines most important activities

Clear and easy to comprehend.

PERT- Program Evaluation Review TechniqueUsed to estimate schedules allowing managers to co-ordinate interdependent activities
Identifies that not all activities can beginning simultaneously
PERT network includes:Identifies all activities
Sequence of activities
Build PERT network
Expected time for each activity
Finding the critical path.
Critical path- length of time to complete all tasks necessary for a project.
Shortest route through the process
Task design classifies job activities to make it easy for an employee to perform and
complete the task.
Plant layout
Most common are product layout and process layout.
Purpose-to enable efficiency and productivity in a plant
Layout should reflect safe work practises
Product layout.
Used in mass production or assembly lines. Sequential arrangement of machines
Process layout
Groupings of machines that involve similar tasks or comparable operations.
Office layout
Organised around work stations to promote efficiency and minimise disruptions
Warehousing- storage of raw materials
Telecommute - to work from home
Robotics- highly specialised forms of technology, capable of complex tasks, unmatched
by human labour.
Computer aided design (CAD)- computerised tool that creates possible products from
inputted parameters.
Computer aided manufacture (CAM)- Allows manufacturing process to become
computer controlled
Stock take- physical counting of goods to determine amount of stock at a certain point in
time.
Just in time (JIT) Order stock when required
Quality management

Quality controls at each stage of processing

Statements of desired quality (not law enforced)
Types of quality management
Quality assurance
Quality control
Quality assurance
Attitude and a series or practises characterised by steps taken before processing to ensure
quality.
Quality control- controls which outline areas where quality parameters are not met.
Employees are a businesss most important asset.
Employment/Human relations cover all interactions among people
Human resource manager co-ordinates all aspects of staffing requirements
Human resource management- is a formal relationship between employer and employee.
Staffing process
Acquisition
- identifying staffing needs
-Recruitment
-Selection
Human resource planning-development of strategies for a businesss future employment
needs. Forecasting needs helps determine:No of employees needed
Qualifications/experience/knowledge
Where/when employees needed
Job analysis specifiesNature of job
Employees responsibilities/environment
Examines job activity and conditions
Job description- written statement describing employee responsibilities associated with
job.
Job specification- lists key qualifications needed.
Recruiting- process of attracting qualified job applicants by advertising
External recruiting- attracting people outside the business (new ideas etc)
Internal recruiting- promoting/promotions
Employee selection- to choose the most appropriate person
Orientation- process of acquainting new employees with the business and their job.
Development
-Training
-Development. Maintenance of databases
Employee training- teaching staff how to do a job more effectively and efficiently.

Development-preparing managers to assume greater levels of responsibility.

Training and development methods
Informal training- employee learns by doing the job
Formal training- classroom teaching/lectures for highly skilled employees
Conference and seminars- discuss new ideas, methods, research, and problems.
Skills inventory- database containing info on skills, qualifications etc of existing staff
Maintenance
-Monetary and non-monetary benefits
Maintenance- working conditions to encourage employees to stay with the business.
Compensation- payment or benefit in exchange for an employees labour.
Motivational techniques:Delegate responsibility
Safe working environment
Communication between employees and managers
Separation
-Voluntary
-Involuntary
Voluntary- an employee chooses to leave the business of own free will
ResignationRetirement-leaves part/full time work
Voluntary redundancy- a persons job is no longer required.
Involuntary redundancy- a business is forced to make people redundant.
Retrenchment- when a business dismisses a person as their is not enough work to keep
them on.
Dismissal- an employees behaviour is unacceptable and becomes necessary to terminate
employment contract.
Employment contract- legally binding formal agreement that establishes rights and
responsibilities on both parties.
Marketing
A process of planning and executing the conception, pricing, promotion and distribution
of ideas, goods and services to create exchanges that satisfy individual and organisational
objectives.
What customers want.
Total system of interacting activities designed to plan, price, promote and distribute
products to present and future customers.
Marketing plan focuses on:
Outlining plans to bring seller and buyer together

-Who will buy the product?

Why will they buy the product?
Core of marketing- satisfy customer wants for repeat sales.
A business finds what customers want and how to satisfy whose wants.
Target market- people who may buy the product.
Target market identified by: Total market approach
Targets the total market. Programs with little variation aimed at everyone.
Market segmentation approach
Total market is subdivided into people who share common characteristics.
Marketing Mix
Product-brand name, packaging, warranty, guarantee
Price- too high- loss of sales, too low- impression of cheap and nasty
Calculated by:
Cost plus margin- total cost of production plus a percentage (margin) for profit
Market price- pricing according to quantity bought/produced
Competitors price- a price below/equal above that of a competitor.
Discount price- reduced price to stimulate demand.
Promotion
Methods used to inform/persuade/remind customers of products.
Personal selling- sales assistant outlines the features of the good or service.
Sales promotion-activities used to attract interest for the product
Publicity-enhances the products features.
Advertising- Informing the public.
Sponsorship- financing an event in return for product advertising.
Place
Distribution of the good or service,
How to transport
How widely distributed.