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5.1 Describe types of business activities

Unit 5

Business Activities

What type of career are you planning to pursue in the future?

No matter where you wind up working, that business (and every other business) must accomplish certain things:

Hiring people
Making/Providing products
Keeping track of expenses

These primary activities keep businesses in operation
Without them, no one would have a job!

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What Is a Business?

An organized effort to produce and/or distribute goods and services

EC:071 Describe types of business activities

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Business Activities

Financial analysis
Human resources management
Information management

EC:071 Describe types of business activities

Marketing
Operations
Strategic management

Business activities

Financial analysis is the process of planning, maintaining, monitoring, controlling, and reporting the use of financial resources.

Human resources management is the process of planning, staffing, leading, and organizing employees.

Information management is the process of accessing, processing, maintaining, evaluating, and disseminating business knowledge, facts, or data.

Marketing is the process of creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.

Operations are the day-to-day activities required for continued business functioning. It includes production, quality control, purchasing, and inventory management.

Strategic management is the process of planning, controlling, and organizing an organization or department.

Discussion #2: Ask students to provide examples of jobs that would fall under each type of business activity.

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The Importance of Business Activities

EC:071 Describe types of business activities

Integration of the primary business activities = reaching specific goals
Businesses adjust activities with changes.

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Unit 5.1 Activity

You will be divided into groups of seven students each.

Select a business that you would like to start.
Select one of the primary business activities: accounting, finance, marketing, human resources management, information management, operations, and management.
Research your selected specialty area using the Internet, newspapers, magazines, and interviews.

As a group develop and share a short presentation on the role and impact of these activities in its business.

Your group may use the Starting Up A Business Template

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5.2 Explain the concept of management

Think that you don’t have what it takes to be a manager?

If so, think again.
There are millions of people employed in management positions in the U.S. today.
They can be found in every industry and hold positions ranging from shift supervisor to department head to CEO.
Here’s the really interesting part—many of these managers began their careers in jobs just like yours.
They started in entry-level positions and, thanks to hard work and perseverance, worked their way up in the business.

Think that you don’t have what it takes to be a manager?

You may not realize it, but you are involved in management every day, whether it’s following your supervisor’s directions or organizing your own workload.
By understanding what management is, you’ll become more productive and successful on the job.
And by becoming more productive and successful, you’ll improve your chances of moving into management, if that’s what you want to do.

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What Is Management?

SM:001 Explain the concept of management

The process of coordinating resources to accomplish an organization’s goals
Managers are the people who make things happen.

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Management Functions

Planning
Organizing
Staffing
Directing
Controlling

SM:001 Explain the concept of management

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Levels of Management

SM:001 Explain the concept of management

Top level or executive
Mid level or middle
First line or supervisory

Levels of management

Management is divided into three levels:

Top level or executive: Responsible for the operation of the entire organization. They are the owners, chief executive officers, presidents, chief financial officers, vice presidents, and general managers.
Mid level or middle: This level of management is responsible for implementing the goals set by top management. Middle managers are the department heads, production managers, sales managers, and district managers.
First line or supervisory: First-line managers take the vision one step further and make it happen. They are the ones who are concerned with actually carrying out the actions and plans that the middle managers identified. They are the office manager, floor supervisor, shift supervisor, and team leader.

Discussion #3: Ask students to give examples of each level of management from their own lives—at their workplaces, in their families, etc.

Management is responsible for managing a business’s resources, including human resources, financial resources, material resources, and information.

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5.2 Case Study

One of Lakshmi’s tasks as manager is to create a business plan for her team based on goals set by the company’s head executives. Lakshmi has been swamped with work and has fallen behind on her planning process. Despite this setback, the business still has the same overall goals and deadlines. If Lakshmi had completed her business plan on time, her team would have been able to reach the proposed goals. Now that she is late, however, her team will have to work long hours and will still struggle to meet the goals in time. Should Lakshmi admit that she lost track of time and adjust the deadlines accordingly? Or should she keep the deadlines and expect her team to come through so the business can stay on track? (Ethical Principles Involved: Integrity, Accountability, Fairness)

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Unit 5.2 Activity

Keep a record for one day of the types of management activities encountered at school; categorize the activities according to the management function represented; state the effect of the activities on the school, its staff, and students (positive, negative, or no effect).

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5.3 Discuss the nature of human resources management

What do you think of when you hear the phrase “human resources”?

The department of a company you hope you’ll get a call from when you want to land an interview?
For many people, human resources or “HR” means a gateway for getting hired.
While HR responsibilities do include staffing, the HR function goes much deeper than just that. Human resources management involves a wide variety of activities—HR employees make sure you get paid, stay safe on the job, and have the tools you need to succeed.
Read on to learn more about the important role of human resources in any business, big or small.

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What Are Human Resources?

The people who work to produce goods and services
Human resources management is the process of planning, staffing, leading, and organizing employees.

HR:410 Discuss the nature of human resources management

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The Importance of Human Resources

HR:410 Discuss the nature of human resources management

Control all other company resources
Make sure employees are available, knowledgeable, productive, and satisfied

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The Role of Human Resources Management

Constantly changing and evolving
Vital role in strategic management

HR:410 Discuss the nature of human resources management

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5.3 Case Study

Ethics Case:

You work in human resources at a small company. Your manager has given you control over this year’s benefits selection process. Your company is not required by law to provide benefits such as health insurance, paid time off, or retirement plans. Your manager reminds you that all of these benefits are expensive and hints that it would greatly benefit the company’s bottom line if you decide not to offer them. He explains that if the company can save costs in this area, it might be able to hire new workers or increase salaries for existing workers. However, you know that many of your coworkers enjoy having a generous amount of paid time off and rely on the health insurance provided by the company. Is it ethical to cut benefits to help the company save money overall? Or should you insist to your manager that employees deserve benefits? (Ethical Principles Involved: Integrity, Trust, Fairness, Respect, Viability)

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5.3 Activity

Interview your parent or guardian to find out their opinion of the human-resources department where they work or where they have worked in the past; ask for examples to support their opinions; and record their responses. - Answer:

Meet with two or three of your classmates to discuss your findings.

Analyze the information for similarities and differences; draw conclusions about the human-resources department; What are your final conclusions about Human Resource Departments: The Good, The Bad, The Ugly

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5.4 Explain marketing and its importance in a global economy

Have you ever searched for a special brand of sunglasses or a custom T-shirt company?

If so, you have been impacted by marketing.
Marketing is all around you.
You experience it everywhere you go.

Advertisements
Items for sale
People promoting ideas

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Research
Product development
Pricing
Promotion
Placement

MK:001 Explain marketing and its importance in a global economy

Marketing Activities

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Three Elements of the Marketing Concept

Customer orientation– business decisions based on customer viewpoints
Company commitment– company works to satisfy needs of customers
Company goals– marketers strive to achieve company goals.

MK:001 Explain marketing and its importance in a global economy

Successful businesses adopt the marketing concept.

It is a philosophy of conducting business that is based on the belief that all business activities should aim to satisfy customer wants and needs while achieving company goals.

Businesses that embrace the marketing concept consider the customer’s point of view first—before making any marketing decisions.

Three elements make up the marketing concept: customer orientation, company commitment, and company goals.

Marketers consider customer orientation by producing and promoting the products that customers want.
A company commitment is evident when an organization serves the interests of customers by improving products, offering competitive prices, and providing outstanding service.
Marketers also strive to achieve company goals.

Discussion #2: Give an example of a company that has adopted the marketing concept.

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Benefits of Marketing

Grows the economy
Provides goods and services
Creates jobs
Improves quality of living
Increases international trade
Creates consumer choices

MK:001 Explain marketing and its importance in a global economy

Marketing plays a large role in the economy.

It helps businesses profit, and it helps us obtain the goods and services that we need and want.

Marketing is one of the most important aspects of business because it directly impacts revenue and profitability.

It is the primary way companies interact with customers.

It creates vital relationships that lead to the development of better products and satisfied customers.

Marketing also helps the development and growth of international trade.

Countries can import products they need and export products for sale.

Countries are able to obtain needed resources and goods.

Jobs are created.

Citizens’ quality of life is improved.

Marketing competition is another economic benefit.

When businesses compete to provide new and improved products at lower prices, it creates jobs and a higher standard of living.

Competition in the marketplace also produces a large variety of goods and services that allow you to choose the products that will benefit you the most.

Without market competition, you would have few products to choose from.

Discussion #3: Give an example of how market competition has benefitted you personally.

Marketing is very important.

Without marketing, there wouldn’t be any products to buy, sell, or trade.

You would have to make your own clothes and grow your own food.
You wouldn’t have books, videos, or music to entertain yourself.

Marketing has a significant impact on the world, the economy, and you.

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5.4 Case Study

Ricardo works in marketing for a soft drink company. His new outdoor advertising plan involves placing billboards geared toward children near schools and playgrounds. Ricardo’s goal is to increase consumption of the soft drink by children ages 5-11. He knows that the drink is not necessarily healthy for young children, but he knows that they can increase sales if they target this market segment. Is Ricardo’s marketing strategy ethical? Why or why not? (Ethical Principles Involved: Integrity, Accountability, Transparency, Rule of Law)

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Activity 5.4

Identify ways in which local businesses apply the marketing concept domestically and abroad and determine how this affects the businesses’ customers.

Write an article / make a screencast / record a podcast to depict your findings.

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5.5 Explain the nature of positive customer relations

Ever had a bad experience with a business?

You probably told your family and friends about it.
One unhappy customer can have a big impact on a business.
It’s important for businesses to take all customer relations seriously.

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Benefits of Positive Customer Relations

Customer loyalty
Increased business
Positive image
Increased productivity

CR:003 Explain the nature of positive customer relations

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Ways To Build Positive Customer Relations

Prevent problems from occurring.
Exceed customers’ expectations.
Make all interactions positive experiences.
Use effective customer relations in every situation.

CR:003 Explain the nature of positive customer relations

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Every Element of a Company Impacts Customer Relations

Business activities
Technology
Communication
Work environment
Employees

CR:003 Explain the nature of positive customer relations

Every element of a company impacts customer relations.

All processes, activities, and technologies affect the quality of a business’s customer relations.

By regularly streamlining processes and updating technology, companies are able to provide convenient experiences for their customers.

Discussion #2: Explain how a company’s superior use of technology provides you with convenience.

Good communication is essential for building positive customer relations.

Developing communication processes and tools in ways that allow customers to easily communicate creates positive interactions.
By actively listening to customers, companies gain a valuable understanding of what customers expect, value, and need.
The valuable information that customers share help companies improve their products and services.

A positive work environment impacts customer relations.

A positive work environment includes an attractive, up-to-date setting that makes customers comfortable.
It includes a corporate culture that promotes teamwork, respect, and professionalism.
When employees treat customers respectfully and work together in positive ways, it makes customers feel welcome, appreciated, and important.

Employees are an important factor of customer relations.

Hiring friendly employees with good problem-solving and decision-making skills helps a company provide good customer interactions.
The importance of good customer relations skills should be stressed during an employee’s hiring process, training, and job evaluations.
How a company treats its employees also impacts its customer relations.
When employees are treated well, they feel important and appreciated which motivates them to treat customers well also.

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Customer-Centric Approach

Employees act professionally.
Customers are treated respectfully.
Concerns are resolved �to customer’s satisfaction.
Promises made are kept.

CR:003 Explain the nature of positive customer relations

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5.5 Case Study

Jack is a customer service representative for a large telecommunications company. His primary responsibility is to help customers work through problems with their cable or internet. He enjoys helping other people and always tries his best to stay positive, even when customers treat him poorly. Today, however, Jack received a call from a particularly irritated customer. The customer was angry that his internet connection was acting up, so Jack led him through the standard troubleshooting procedures. The customer wasn’t satisfied with Jack’s help, and even called Jack several derogatory names. Furious, Jack hung up on the customer – he had had enough! Later that day, Jack felt bad that he hadn’t handled the situation more professionally. But the customer was so rude, even when Jack tried his best to help him. What do you think? Should Jack have continued to help the customer even though he was being treated poorly? (Ethical Principles Involved: Fairness, Respect, Viability)

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Activity 5.5

Analyze a school-based enterprise or local business to identify actions taken by employees to establish and/or maintain customer relationships. What techniques/strategies do you think that management could use to reward employees for establishing/ maintaining positive customer relations? You can also do some research on how successful companies achieve this.

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5.6 Describe the need for financial information

Financial information is important.

Have you ever tried to budget or save for a large purchase?
It’s important to know how much you can spend.
Businesses also rely on financial information.

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Financial Information Is Important to Businesses

Business data must be organized into useful information.
Financial statements are used by many internal and external users.

FI:579 Describe the need for financial information

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Qualities of Useful Financial Information

Understandable
Relevant
Reliable

FI:579 Describe the need for financial information

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Benefits of Using Common Accounting Standards

Data are created with consistency.
Data are comparable.

FI:579 Describe the need for financial information

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Financial Information Is Useful

Assists with decision-making
Helps with business plans and strategies
Predicts future financial trends

FI:579 Describe the need for financial information

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5.6 Case Study

Ethics Case:

Alexis works as a managerial accountant for a large retail company. One of her most important responsibilities is interpreting her company’s financial information and recommending appropriate actions to upper management. Alexis’s company is considering making renovations to its main office building, which is outdated and in need of repairs. Her manager asks Alexis to determine whether the company has enough money in the budget to afford major renovations this year.

Alexis really wants the office building to be updated – she’s sick of the ant problem, the lack of insulation, and the broken kitchen appliances – but the budget doesn’t quite justify the expense. Alexis figures, however, that the money will be made up once the busy holiday season brings in additional revenues. She’s considering “fudging the numbers” so that the renovations will be a go – after all, improving the office building would increase employee morale and decrease turnover, saving the company money in the long run. What do you think? What should Alexis recommend that her company do? (Ethical Principles Involved: Integrity, Transparency, Rule of Law, Viability)

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Activity 5.6

Interview a business partner or research why s/he/they need financial information, how s/he/they use that information, and what types of information s/he/they use.

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5.7 Explain the concept of accounting

Ever had a goal to save for a big purchase or to budget your money?

You probably found it helpful to keep track of all the money you saved or spent.
When you keep careful records, you know exactly how much money you can spend or save at any given time.
You are keeping track of (accounting for) your money.
Just as you need to account for your money to accomplish your goals, so do businesses.

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Accounting

Process of gathering, recording, organizing, and reporting financial data
Shows a business’s financial health
Provided for internal and external users

FI:085 Explain the concept of accounting

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Accounting Tools

FI:085 Explain the concept of accounting

Accounting system
Accounting cycle
Bookkeeping
Journals and ledgers

Accounting tools

In order for a business’s accounting records to be useful, a business must make sure that everyone handling its financial records follows the same methods or procedures.

A business sets up an accounting system—a consistently applied process for handling its financial information.

To be effective, the system should be easy to use, expandable, process data quickly, and be affordable to operate.
It should also protect the business by preventing financial loss and identifying risks.

Businesses typically use a process called the accounting cycle to maintain their financial records effectively. The first four steps of the accounting cycle are all aspects of bookkeeping which must be performed on a daily basis to maintain a company’s journals and ledgers. Accountants perform the remaining steps which involve summarizing the data into financial statements and closing the books.

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Analyzing Transactions

Source documents are analyzed.
Amounts and accounts affected are determined.

FI:085 Explain the concept of accounting

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Journalizing Transactions

Cash accounting method

Journal entries made when money is exchanged
Tracks the actual amount of cash on hand

Accrual method

Journal entries made when transaction is initiated
Tracks sales and expenses instead of cash

FI:085 Explain the concept of accounting

Journalizing transactions

Transactions are recorded in the order that they occur within the appropriate journal.

Businesses typically use either the cash accounting method or the accrual method to record income and expenditures.

The cash accounting method records transactions at the time the money is exchanged.

When customers make payments, the transactions are recorded as income, and when the business pays for items purchased, those transactions are recorded as expenses.
The cash accounting method tracks the actual amount of cash that the business has on hand.

The accrual method journalizes income and expenditures at the time they are initiated such as a customer’s credit purchase, even if no money changes hands at that time.

This method is often used by large businesses and ones that offer credit.
The accrual method allows a business to track sales and expenses instead of the amount of cash received or paid out.

Discusssion #2: Share an example of a situation where the accrual methods could provide a business using it an advantage.

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Posting to Ledgers

Journal records are posted to appropriate ledgers.
Ledgers contain records for specific departments.

FI:085 Explain the concept of accounting

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Balancing the Books

A trial balance is prepared.
Lists current balances of different ledger accounts
It is used to check the accuracy of journal and ledger entries.

FI:085 Explain the concept of accounting

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Preparing Financial Statements

Balance sheet—captures current financial condition
Income statement—shows profit and loss
Cash flow statement—estimates expected cash flow

FI:085 Explain the concept of accounting

Preparing financial statements

Accountants summarize a business’s financial information and format it in reports that can easily be understood.

They use accounting standards to ensure the financial information they create is consistent.

Consistency makes it easier for internal and external users to accurately interpret a business’s financial statements.

Balance sheet

The balance sheet captures the business’s financial condition at a particular point in time.
It presents the components of the basic accounting equation: Assets – Liabilities = Owner’s Equity.
The balance sheet gets its name from the fact that both sides of the equation must balance each other.

Income statement

The income statement, sometimes called the profit-and-loss statement, shows how much money the business has made or lost during a specific period of time, usually one year.

Cash flow statement

A cash flow statement is a financial summary estimating how much cash is expected to flow into the business in the given time period.
This information is used to plan ahead by generating more income and/or reducing expenses.

Discussion #3: Explain a situation when a business may need to prepare a cash flow statement.

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Closing the Books

Temporary accounts �are closed.
Account balances are transferred to permanent accounts.
Accounting cycle �starts over.

FI:085 Explain the concept of accounting

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5.7 Case Study

Several years ago Susannah, an accountant, started a small clothing boutique with her best friend Jennifer. The boutique recently suffered a major loss after an entire shipment of inventory was ruined by a water line break that flooded the store. Jennifer tells Susannah that she is worried about the boutique’s financial health – and that she is considering shutting it down. Susannah is devastated – she’s confident that she can find a way to work the numbers so that the store can stay open.

After spending hours with the budget, Susannah is frustrated and tired. She realizes that Jennifer is right – the store’s finances have been going downhill for quite some time. She knows that the boutique can’t stay open for much longer without going bankrupt. But Susannah has invested so much time and effort into the store that she can’t bear the thought of it closing. She’s debating simply telling Jennifer that everything is fine and dealing with the store’s debts later. What do you think? Should Susannah tell Jennifer the truth? (Ethical Principles Involved: Integrity, Trust, Transparency, Respect, Viability)

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Activity 5.7

Examine the accounting activities performed for a school-based enterprise or somewhere they or their parent or guardian has worked, determine why each of the activities is performed, share your finding written/video/audio response, your choice:

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5.8 Explain the role of finance in business

Ever dreamed of running your own business?

You probably have a product in mind.
You may have thought about a business location.
Do you know how you will fund it or handle your finances?

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What Is Finance?

The way a company funds itself and manages its money
The function of money and money management

FI:354 Explain the role of finance in business

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Finance vs. Accounting

Accounting

Recordkeeping activities
Provides accurate financial information

Finance

Money management decisions
Boosts company growth and reduces risks

FI:354 Explain the role of finance in business

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The Importance of Finance

Helps set future goals
Plans and controls spending
Ensures sufficient financing
Makes sure customers pay their bills
Invests company money

FI:354 Explain the role of finance in business

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Finance Activities

Administration of assets
Financing

FI:354 Explain the role of finance in business

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Working Capital Management

Short-term decisions
Balances assets and liabilities
Cash conversion cycle
Return on capital

FI:354 Explain the role of finance in business

Working capital management

Working capital management refers to decisions made for the short term to balance a company’s assets and liabilities.

These decisions are primarily focused on the management of accounts payable and receivable, inventory, and cash.

A key component of managing working capital is the cash conversion cycle which refers to the number of days that pass after a company has purchased raw materials, created products, sold them, and received payment.

Keeping the cash conversion cycle as short as possible helps a company create a positive cash flow that makes it easier to conduct business.

Another key component of managing working capital is referred to as return on capital.

Return on capital measures how well a business generates cash flow in relation to the capital (both debt and equity) it has already invested in itself, and it is usually expressed as a percentage.
By making sure that return on capital is positive, finance managers are able to help a company grow in value.

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Capital Investment Decisions

Long-term decisions
Capital budgeting process
Identifies profitable projects
Selects type of funding
Determines dividends

FI:354 Explain the role of finance in business

Capital investment decisions

Capital investment decisions are made for the long term and determine a company’s major projects, how to finance them, and whether or not to pay dividends to the company’s shareholders. These decisions are referred to as the capital budgeting process.

Capital budgeting process

The first step is evaluating a project’s potential ability to produce profit.

Then, finance managers determine how to fund the project by identifying the best use of existing equity (cash and assets) and whether or not to incur debt by obtaining business loans.

Discussion #3: Share an example of how a company can use existing equity other than cash to fund a project.

When finance managers fund a project, they are trying to create an “optimal mix” of financing (debt and equity) to create a capital structure for the company to operate within.

The final step of the capital budgeting process is determining how a company will handle its profits.

A company has to decide whether or not to pay dividends to its shareholders and, if so, when and how much.
It also must decide whether to pay them in the form of cash or in the form of stock.
When a company does not pay dividends, it must decide whether to finance new projects or to reinvest in existing ones.

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Activity 5.8

Research on how finance activities are performed at big and small businesses and develop a rationale for those differences and similarities

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5.9 Explain the nature of operations

What things do you do every day to keep yourself on track?

Homework, exercise, shopping, laundry?
These tasks may seem simple, but they are important.
If you don’t complete them, you will be less productive.

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Operations

Operational activities
Production process

OP:189 Explain the nature of operations

Operations

Discussion #1: Give an example of a small task you do each day to keep yourself organized, save time, or help yourself accomplish a goal.

The day-to-day activities for continued business functioning are known as operations.

Operations allow a business to take inputs such as employees, raw materials, and equipment to produce the outputs of goods and services.

The operations activities of manufacturers are often more tangible than service providers since they produce a tangible or physical product.

However, even businesses providing intangible products like hairstyling, music concerts, or Internet service still have a production process and many operational activities.

The two main concerns of operations managers are efficiency (keeping costs low) and effectiveness (keeping customers satisfied).

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Production Planning

Creates foundation for operations
Plans operating system

People
Places
Materials
Equipment
Information

OP:189 Explain the nature of operations

People

Equipment

Information

Places

Materials

Operating�System

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Site Selection and Layout

Location
Costs
Labor available
Community
Designed to achieve business goals

OP:189 Explain the nature of operations

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Operational Activities

Purchasing
Quality control
Inventory control

OP:189 Explain the nature of operations

Purchasing is the process of buying goods and services for a business.

Purchasers seek to obtain materials, products, and supplies when they are needed, in the right amounts, and at the best price.

A business’s purchasing needs vary depending on the type and size of the business.

A small boutique, for example, has different needs than a large online retailer.

Quality control ensures the degree of excellence of a good or service.

General standards of quality include performance, durability, serviceability, and conformance.

When a business produces quality products, it is able to keep and gain customers and can also outperform competitors.

Lower costs and higher productivity also result from quality control since there is less wasted material, less time spent fixing problems, fewer returns, and fewer lost sales from unhappy customers.

Discussion #2: Explain a quality-control measure used by a business you are familiar with.

Inventory control is used to manage raw materials, partially finished, and finished goods inventory.

Businesses must make sure they don’t run out of materials or buy too much, because both of these situations can cost a lot of money.

The inventory control needs of businesses vary widely.

Producers and retailers have much more physical inventory to manage than service providers.

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Operational Activities

Logistics
Routing
Scheduling

OP:189 Explain the nature of operations

Logistics refers to managing the flow of goods and services from production to consumption.

This includes all the people, information, and processes involved in storing and transporting goods.

Operations managers decide where and how to store goods as well as how and when to transport them to customers.

Routing is the process of selecting the path and sequence of operations to be performed.

Routing determines the flow of work and sequences production steps to achieve maximum effectiveness and efficiency.

Scheduling establishes the timetable to be followed in production.

It determines when materials will arrive at a certain destination and how long they will stay there.

To make timing decisions, operations managers must have a thorough knowledge of each step in the production process and how long it takes.

When routing and scheduling work together, the entire production process flows smoothly.

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Operational Activities

Safety and security
Maintenance and repairs
Expense control

OP:189 Explain the nature of operations

Safety and security of employees, customers, and visitors is a responsibility of operations.

Businesses establish internal rules/procedures and comply with government standards for employee, public, and environmental safety.

Operations managers may also be responsible for the company’s security needs (alarm systems, security guards, etc.).

Some businesses like hospitals and airlines are much more concerned with safety and security issues.

Maintenance and repairs are regularly performed by operations to maintain a business’s facility and equipment.

Additionally, routine custodial work is handled by the operations function.

Both production and service-oriented businesses using machinery, tools, and vehicles devote more time to maintenance and repairs than other types of businesses.

Expense control is another function of operations.

Since operations managers control so many business activities, they have many opportunities to control a company’s expenses.

When operational managers improve efficiency, reduce waste, control inventory, and make wise purchases they are able to make a positive impact on a company’s net income.

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Impact of Technology

Materials, supplies ordered online
Inventory managed with software
Logistics monitored with RFID
Products built with CAD, 3D printing, robotics
CAM improves quality and efficiency

OP:189 Explain the nature of operations

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Importance of Operations

Impacts every business function
Supplies quality products
Helps achieve business and financial goals

OP:189 Explain the nature of operations

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Activity 5.9

Develop a definition of the term “operations,” determine what business activities are associated with it, and compare operations in a big business with that of a small business.

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5.10 Identify ways that technology impacts business

You depend on technology for many things.
So do businesses.
List your top 3 must haves!!!

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Business Application of Technology

Technology is “the practical application of science to society and industry.”
New devices/inventions
Improvements to materials/new processes
Helps companies improve and compete
Innovative technologies create new industries

NF:003 Identify ways that technology impacts business

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Important Technologies

Internet
VoIP
Mobile phones/devices
GPS
Computer technology
Databases
Computer networks
Electronic transfer �of funds

NF:003 Identify ways that technology impacts business

Computer automation
Improved materials/processes
Virtual reality

Important technologies

The Internet provides a way to quickly conduct local and international business, and also improves internal communications and research abilities.

Voice over Internet Protocol (VoIP) services provide video conferencing capabilities that make it easy to run virtual meetings with people around the world.

Mobile phones and devices allow a business’s employees to easily contact coworkers and clients, respond to email messages, and manage their schedules.

Global positioning systems (GPS) help a company manage its travel and shipping activities.

Computer technology which includes computer hardware and software help a business’s operations run more smoothly and efficiently.

In addition, expert systems that mimic the knowledge of a human expert help businesses complete highly skilled work.

Databases provide a business an easy way to store, manage, and protect its data.

Data, such as intellectual property, customer information, and business records, are valuable resources that help a company operate, and conduct research and marketing activities.

Computer networks provide an easy way to keep employees and information connected both at the office and when working remotely.

Electronic transfer of funds allows a business to manage and automate its payments and banking activities, which saves time and reduces errors.

Computer automation such as computer-aided design (CAD) and computer-aided manufacturing (CAM) help companies design, create, test, and produce products more efficiently.

Improved materials and processes help businesses create quality products in the most time-saving and cost-effective ways.

Virtual reality can be used to train employees.

Virtual training is especially helpful for highly skilled and technical jobs such as flying an airplane or conducting medical surgery.

Discussion #2: Ask students to share another example of an important technology that is impacting business today.

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Technology’s Impact on Business

Affects industry
Changes the nature of marketing
Impacts jobs
Increases competition
Information age

NF:003 Identify ways that technology impacts business

Technology’s impact on business

Technology affects industry.

Sometimes technology creates an entirely new industry (aviation, computers, robotics).
Technology can also stimulate industries related to the innovation (glass, rubber, steel used to produce cars).
Technology also significantly alters or eliminates existing industries and jobs (manufacturing impacted by automation and robotics).
Sometimes technology simply aids or alters the way employees conduct their work.

The nature of marketing has changed.

New and improved methods of communicating and information gathering have led to online marketing, shopping, and customer service interactions.
All these online interactions provide businesses a great deal of information they can use to refine and target their marketing campaigns.
Technology also makes it easier for a business to sell products or set up operations in new or overseas markets.

Jobs have changed.

Employees must regularly update their skills to compete for positions requiring technical knowledge which continually changes.
The nature of work has also changed due to increased opportunities for telecommuting and collaborating.

Discussion #3: Ask students to predict how technology will impact jobs in the future.

Competition has increased.

New materials, tools, and operating systems allow businesses to achieve higher productivity and reduce costs.
It’s important for businesses to keep pace with technology if they want to remain competitive.
Some industries such as computer and auto manufacturers must lead the way by developing innovative technologies to remain competitive.

Information age impacts business.

Technology makes it easy to gather information which helps a company identify trends, determine appropriate business strategies, and make decisions.
Information gathering technology also makes it easier for a business to learn about its customers and quickly interact with them.
These information-related activities help a company greatly improve its marketing and customer service efforts.

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5.10 Case Study

Bryant is a marketing manager at a small outdoor-supply company. As part of his job, he maintains a database of customer contact information including home addresses, phone numbers, and email addresses. One day at work, the database malfunctions. While troubleshooting the problem, Bryant accidentally activates a promotional email that sends every subscribing customer a 40% off coupon. Bryant knows that his company will lose money if every customer is able to buy merchandise for such a large discount – but he feels bad revoking the coupons. It was his mistake, after all. What do you think Bryant should do? Should he issue an apology and deactivate the coupons, or should he do nothing? (Ethical Principles Involved: Integrity, Accountability, Fairness, Viability)

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Activity 5.10

Analyze the work that they or adults they know do at work, identify and list the ways that technology has impacted the work, and create a visual to depict that impact. - Make A copy of the 5.10 Jam Board

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5.11

Discuss the nature of �information management

Ever had to make a large decision?
You need accurate information to make a good decision.
Businesses also rely on information to make decisions.

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Information Management

Management of information and data
Storage of data in �useful formats
Refers to any knowledge that holds value

NF:110 Discuss the nature of information management

Information management is the process of accessing, processing, maintaining, evaluating, and disseminating knowledge, facts, or data for the purpose of assisting business decision-making.

A business’s overall information management program collects internal and external data, stores them, processes them into information, and presents them in a useful format.

Some general types of information that any business must manage include customer information, personnel files, accounting records, tax returns, correspondence, and contracts.

Any type of knowledge that holds value for an organization is considered information and must be managed.

Discussion #1: Ask students to choose a type of business and identify important information that is specific to its particular industry.

Information can come in many different forms, including physical forms (anything on paper) and electronic forms (emails, videos, spreadsheets, social media posts, etc.).

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The Importance of Information Management

NF:110 Discuss the nature of information management

Reduces business risk
Saves time and money
Serves customers effectively
Creates consistency and credibility
Documents compliance with laws
Preserves identity and brand
Achieves business continuity

The importance of information management

When a company is able to make informed decisions, business risk is reduced.

Effectively organized information reduces information overload and increases productivity, saving time and money.

Accurate and relevant information helps a business serve its customers more effectively and stay ahead of its competitors.

The ability to create organizational consistency regarding business matters increases credibility and builds a good reputation.

Documenting business activities helps a company comply with laws and avoid legal problems.

A business’s identity and brand is preserved by protecting valuable intellectual property, such as copyrights, patents, and trademarks.

Maintaining backup systems and storing vital information off-site allows a business to access information and continue operating during an emergency.

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Information Management Guidelines

Make sure information is effective.

Accurate and complete
Up to date
Retrievable
Accessible and secure

Establish and follow policies.
Prioritize important needs.
Have a coordinated plan.
Assign responsibility.

NF:110 Discuss the nature of information management

Guidelines for effective information management

Make sure information is effective.

Information must be accurate, up to date, complete, and retrievable—easy to locate when needed.
It should be accessible to the employees who need it, and have security measures to prevent access by others.

Establish and consistently follow policies.

Managers must put policies and practices in place and make sure that employees are following them correctly.
When employees keep accurate information, it helps employees keep track of all business activities.

Prioritize important information management needs.

A business should decide what its most important information needs are, so it can focus on the most important ones first.
For example, a business may need to decide whether it’s more important to control inventory or manage customer records.

Have a coordinated plan in place to manage information.

Departments should be able to communicate with each other easily and share information as needed.

Assign responsibility for information management.

Certain employees may have information management as part of their job descriptions.
However, everyone in the organization should be given responsibility for doing her/his part.

Discussion #2: Ask students to share examples of how they have managed information for their employers.

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Challenges of Information Management

Employees’ roles are misunderstood
Information overload
Companies have unique needs
Changing needs and technologies
Risk of electronic storage

NF:110 Discuss the nature of information management

Risk of audits/lawsuits
Protect proprietary knowledge
Protect customers
Disaster recovery

Challenges of information management

Employees’ roles of information management are often not understood, which prevents them from maintaining important information.

Information overload makes it hard to distinguish between what information is important and what is not.

Companies have unique needs that require many decisions about what information is important, where and how long it should be stored, and who should have access to it.

Frequent changes in business needs and technologies impact a business’s information management system.

The storage of electronic documents presents many risks—loss of data, viruses, hacks, and system failures.

If information is managed improperly, it can lead to audits and lawsuits.

Companies must protect proprietary knowledge, such as trade secrets and contracts.

Companies are legally responsible for protecting customers’ personal information and preventing unwanted spam and junk mail.

In the event of a disaster, information must be made accessible to employees so the business can continue to operate.

Discussion #3: Ask students to share an example of a challenging situation created by information management experienced by a business.

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Information Management Trends

Built-in reporting procedures help with regulation compliance
Accurate information needed for increased competition
IT resources/security needed for outsourcing and remote workers

NF:110 Discuss the nature of information management

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Activity 5.11

Now that you know what information management is, select a large company like Amazon, Google, or Walmart and determine what types of information they are collecting. Create a diagram with the information collected and WHY they are collecting it.