Business Functions I

Business Function: Concept used to define the role of the enterprise.


Strategy - The direction and scope of an organization over the long term. Exists at different levels:
1. Corporate strategy
2. Business unit strategy
3. Operational strategy

Planning - Mapping out exactly how to achieve a particular goal. Primary function of management.

Budget: A financial and/ or quantitative statement prepared and approved prior to a defined period of time of the policy to be pursued during that period for the purpose of attaining a given objective. May include income, expenditure and employment of capital.

Budgeting: The formulation of plans for a given future period in numerical terms.

Budgetary control: certain standards of performance are laid down, and used to monitor, measure and regulate actual performance.
- Specific and time bound targets
- Facilitates management by exception by stressing on those operations which deviate from budgeted standards in a significant way.

R&D: Businesses focus on discoveries that can be commercialized.

Business location – cost of business location, communication, labour, market, suppliers and government assistance are all determining factors.

Decision making

Government policy - Attitude of a business towards the government and its policies depends less on the politics of the owners and more on the state of their business.

Supply chain management: The oversight of materials, information and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.
- Product flow
- Information flow
- Finances flow

Two types of SCM Software:
- Planning applications
- Execution applications
Open data models: support the sharing of data both inside and outside the enterprise (i.e. to the extended enterprise) – shared upstream and downstream.

Types of production method:

Transformation process, aka production and operations management (POM)

1. Job Method: Complete task handled by a single worker or groups of workers
a. Low tech – small scale
b. High tech – larger complex scale

2. Batch method: work for any task is divided in parts or operations – specialization of labour. Risk of production equipment lying idle.

3. Flow method: Similar to batch method but solves problem of idle equipment.. Method of production organization where the task is worked on continuously or where the processing of material is continuous and progressive. As work on a task at a particular stage is complete, it must be passed directly to the next stage for processing without waiting for the remaining tasks in the batch. When it arrives at the next stage, work must start immediately on the next process. In order of the flow to be smooth, the times that each task requires on each stage must be of equal length and there should be no movement off the flow production line. Requires substantially constant demand.
4. Group method