Operations
Production management systems:
deal with converting raw materials into
finished goods or products.
This is done by deciding on the inputs,
outputs, processes and controls that need
to take place in order to ensure a product
or service is created in line:
- With the specifications
- within the quantity
- by the schedule demanded
- at a minimum cost to the business.
• PMS are the sequences and processes of
activities transforming raw material
(factors of production) into an end, useable
product or service.
• PMS work to monitor and control the
production process to ensure the inputs
are organised, production processes are
operating effectively and efficiently, and
outputs meets quality standards.
• A business has a goal to produce goods and
services at the right quality, right
quantity, at the right times at minimum
cost.
• They help a business to achieve business
goals, build a positive public image,
support other business functions and be
competitive.
- Product development outlines the stages
from when a product/service is conceived
as a raw idea to when it is finally brought
to market.
- The elements of the product development
are usually outlined in a series of
sequenced events which typically include:
o Ideation
o research and development
o prototyping
o testing
o commercialisation
- Each one of these events require an
investment of skills, financial resources,
and time.
- Hence there is an inherit risk associated
with product development as there will
always be a level of uncertainty about
whether resources invested will pay
dividends in terms of sales and customer
satisfaction.
Quality Management: Quality management
is the act of overseeing all activities and
tasks needed to maintain a desired level of
excellence.
Features of Quality management:
1. Quality control (QC)
2. Quality assurance (QA)
3. Quality improvement (QI)
Quality Control (QC):
• Refers to the process that involves
checking and reviewing work processes to
determine if the requirements of the
business are being met.
• The new manufacturing equipment would
need to meet the production needs of the
business.
• QC focuses on the product to find defects
that remain after development.
• QC professionals find these issues in a
variety of ways, including software testing
and beta or canary testing.
Quality Assurance (QA):
• Refers to the methods used by a business
to ensure the quality of its products.
• The business would need to ensure that the
new equipment is able to meet the
manufacturing targets and standards
(including customer satisfaction) set by
the business.
• QA is the process of guaranteeing a
product’s quality to the consumers.
• QA informs customers that products have
been manufactured to a quality standard
doing things right the first time.
• It involves checking and reviewing the
production process.
• The focuses on preventing poor quality
products as opposed to correcting
problems.
• It can allow employee participation,
generating new ideas for operations,
processes and the quality of the end
product, resulting in improved staff morale.
• QA can result in a reduction of production
costs, less waste and reworking of
products.
Quality Improvement (QI):
• Refers to the analysis of business
performance and business efforts to
improve performance.
• To invest in the equipment, the business
would want to ensure that the equipment
can provide a higher quality product and/or
is more efficient.
• Is the systematic approach to reduction or
elimination of waste, rework, and
minimisation of losses in the production
process.
• refers to the continuous improvement
process focused on processes and systems.
• involves to the analysis of business
performance and business efforts to
improve performance.
• includes features such as benchmarking or
quality circles, Kaizen and Total Quality
Management.
 Operations
Inventory Control Techniques:
• just-in-time
• just-in-case
Just-in-time:
- The just-in-time technique is an inventory
technique that is based on inventory being
manufactured at the time the products are
needed (just the right amount/number of
goods/services needed.)
- These products would also be delivered to
customers upon completion of the
production process.
- This eliminates the need for inventory
storage, wastage and other costs.
Advantages of Just-in-time:
1. There is a less storage space needed which
allows a business to save on rent and
insurance costs.
2. It discourages the build-up of any unsold
products.
3. There is a minimal chance of stock
becoming ‘out-of-date.
Just-in-case:
- The just-in-case technique is an inventory
technique that is based on having spare
inventory (this could include raw materials,
spare parts, etc.) in stock just in case it
needs to be used.
- The business is manufacturing its products
based on either a predicted or planned
sales rate.
Advantages of Just-in-case:\
1. Greater ability to meet any unexpected
increases in demand for the business’
product as there is always inventory on hand
to meet these demands.
2. Reduces down-time in production as there is
no delay in inventory from suppliers.
3. Customer satisfaction is maintained as
production does not wait for materials to be
delivered.
4. Businesses could reap the benefits of
economies of scale, such as buying supplies
in bulk.
Finance
Types of Financial Institutions:
• banks
• finance companies
Banks:
Banks offer a variety of deposit, investment
and loan accounts to businesses.
The money collected from depositors and
money earned from investment is used to fund
loans to customers.
Finance Companies:
- Finance Companies provide loans for
businesses.
- They gain their funding from banks and other
financial institutions at a set interest rate
and uses these funds to extend credit to
customers.
- A finance company will earn profit by
charging its customers a higher interest
rate than what they are paying and may
charge loan fees and other administrative
charges.
Internal Funding:
• Retained profits
Retained Profits:
- Retained profits is an internal source of
finance.
- They arise from the internal activities of a
business, as opposed to finance from external
sources.
- Retained profits is the portion of a company's
profits (after tax) that is not paid out as
dividends to shareholders but is instead kept
in its accounts for future use.
- It is a source of finance which could help with
long-term activities of a business, more so
that short-term.
External Funding:
• debentures
• share capital
• trade credit
• venture capital
• secured loans
• financial institutions
• government
Debentures:
- They secured against the firms assets
- Are issued by a company as a long-term loan to
the debenture holder.
- These provide a long-term source of finance
without the business losing any control.
- Debenture holders do not have a voting right,
so a business could raise funds without losing
any control of the company.
Share Capital:
- The funds raised from selling shares in a
limited company.
- The funds raised can generate a large sum of
finance for a company and is a main source for
limited companies.
- Should a company raise funds from selling more
shares, the company would increase the number
of shareholders to whom profits are
distributed.
 Finance
Trade Credit:
- Refers to an amount owed to suppliers for
goods and services supplied on credit and
not yet paid for.
- Could mean ‘free finance’ as the suppliers
may not charge interest on the amount
outstanding.
- A flexible form of finance as businesses can
decide when to pay and is widely available in
most industries.
Venture Capital:
- Is a form of private equity and a type of
financing that investors provide to start-up
companies and small-medium sized businesses
that are believed to have long-term growth
potential, normally at the start of a
business idea.
- The amount borrowed can be paid back over a
number of years.
Secured Loan:
- Finance obtained from a bank or other financial
intermediary that can be for short-term or
long-term.
- Interest charges can be fixed or variable on
the loan.
- The amount borrowed is paid back over a
nominated period of time.
Financial Institutions:
- Banks, finance companies, merchant banks, life
insurance companies and general insurance
companies provide various short-term and long-
term external sources of finance.
Government:
- Governments can offer financial support to
businesses or industries by providing
government grants or one-off payments that do
not need to be repaid.
- Although, for many businesses, government
grants may be difficult to receive.
Leadership
Leadership Traits needed in a Cross-
Cultural Setting
• skilled communicator
• socially aware
• skilled decision maker
• future thinker
• self-discipline
• responsible
• motivational
Skilled Communicator:
• This trait enables a leader to effectively
encode messages that transcend language
and cultural barriers.
• The communication itself has to be
incredibly nuanced in that it adheres to
the cultural norms of people who receive
the message.
• As well as adhering to cultural norms, the
message itself must be clear enough for a
message to be understood.
Socially Aware:
• Cultures are socially constructed so an
effective leader must understand the
social dynamics of a particular type of
culture if they are to be able to be
accepted within various cultural groups,
such as ethnic cultures and popular sub-
cultures.
• A leader who understands the way
relationships are formed and maintained
can help to create a positive and
effective workplace.
Skilled Decision Maker:
• When someone makes a decision, they take
action from a series of options.
• They assume the implications of each
decision and follow a well thought-out
and reasonable rationale as to the
decision itself, despite any inherit risk.
• This rationale must be in-tune with what
is happening on a cultural level within
an organisation because the way in which
a decision is made can be the results of
ones own cultural values.
Future Thinker:
• A leader who is a future thinker is
someone who is able to anticipate, predict
and imagine opportunities and challenges.
• They can do this by investigating trends
and using their intuition to uncover
potential areas of business growth.
• Future thinking can also enable a leader
to establish shared visions among fellow
staff.
• Future thinking can be the catalyst for
motivation in the workplace.
• Thinking about the future can be
something that transcends cultural
boundaries, however, there may also be
variations on the level of importance
different cultures place on the future.
 Leadership
Self-Discipline:
• This refers to being able to control yourself
in terms of how you feel and act in particular
situations, especially ones in which there is a
temptation to do (or not to do) something
else.
• In a cross-cultural setting this could mean
being able to keep your emotions under
control, especially if there is some sort of
miscommunication or misunderstanding between
people from different cultures.
• As a leader, it could also mean being able to
stand outside your cultural comfort zone and
be able to make a determined effort to apply
and embrace cultural norms.
Responsible:
• The ability to be independent, accountable,
accept authority and be more aware that
actions have consequences.
• The need in a new cross-cultural setting to
understand pre-established ideas, to
understand where adaptation or new ideas are
required, to demonstrate they can think for
themselves, often seeing new perspectives,
real purpose and outcomes.
Motivational:
• The ability to use psychological forces/motivate
people to strive for certain goals rather than
simply act on orders.
• Leaders need to be aware in a new cross-
cultural setting to provide motivation, direction
and support for staff while recognising
differences in intrinsic and extrinsic
motivations, rewards and punishments in
different cultural settings.
Adapting Leadership Styles in a Cross-
Cultural Setting:
• autocratic
• participative
• situational
Marketing
Impact of Technology on Business
Operation in Global Markets:
• technology that assists business in
the expansion into global markets
• e-commerce, security and privacy
issues
Technology that Assists Business in the
Expansion into Global Markets:
impacts of technology assisting in global
expansion includes:
• access to relevant and reliable hardware
and software to meet the business’ needs.
• impact of cost to purchase and maintain
technology.
• staff capability, skills and training
• ability to adapt to new ways of doing
things as technologies evolve, limiting
risks to the business, staff, stakeholders
and others in a digital environment.
E-commerce, Security and Privacy Issues:
• e-commerce depends upon the use of
technology to assist with the transferal
of data/information, including finance
• impact – the need to implement security
systems designed with relevant privacy
interfaces/levels of access for various
stakeholders who need to access the
systems (i.e. not all users –
staff/suppliers/customers – need to have
access to all information in the system)
• the system would potentially need to
operate 24/7 in a global market, so impacts
in terms of costs of developing,
maintaining and upgrading of systems –
both software and hardware
• costs of staff training or employment of
skilled staff across all global locations
to operate systems and comply with
security and privacy business policy and
legal requirements according to each
country of operations, therefore impacts
the complexity and costs of doing
business.
Use of Technology in Global Markets:
• distribution of products
• e-commerce
• social media campaigns
Distribution of Products:
• Communicating directly with customers
globally through email, or video
conference such as Zoom or teams calls
assists in global distribution.
• Businesses can use a website for e-
commerce: customers are purchasing more
and more online and are receiving
products delivered to home through
enhanced technology in transport,
tracking and delivery systems.
Marketing
Distribution of Products CONTINUED: Social Media Campaigns:
• Technology can be used to help track • The use of marketing strategy/social
inventory of global distribution in real media campaigns for a new product
time. globally (adaptive release or real time)
• Technology aids in the transfer of supported by the use of technology.
equipment and delivery methods. • Can be an effective tool to help promote
• Technology can be used to reduce costs the business by e.g. posting photos of
and improve accuracy in procurement and their products.
inventory. • The aim is to increase the follower base
• Technology enables increased access to and potential global market.
data and collaboration in supply chains. • Businesses can build a presence through
• Technology can be used for faster social media (Instagram, Facebook,
planning and decision making, hence Snapchat ) and create a web presence
faster problem solving. (website) to be a magnet for potential
• Technology used in transportation e.g. (international) customers.
GPS technology, makes tracking faster and • It allows them to gain exposure and
more efficient. provide easily accessible customer
• The use of apps facilitates quick, support.
efficient procedures, including the use • Could use daily Instagram for stories,
of credit cards with encrypted payment working on gaining more international
facilities which are safe. followers, giving free products to
influencers across the globe.
E-commerce:
• E-commerce allows businesses to access
consumers globally.
• Consumers have 24/7 access to online
shopping; therefore, businesses can
potentially be making sales 24 hours a
day, leading to increased profits.
• Businesses and consumers can locate and
purchase goods and services globally.
• E-commerce allows for quicker
communication and integration of
purchasing, distribution and payment
systems.
• Businesses can provide secure payment
systems such as PayPal, where consumers
feel safer when they purchase.
• Currency conversions can be automated
on websites, increasing accessibility to
all consumers; therefore, the business is
reaching a wider target market.
• Languages can be translated, which
provides more accessibility for buyers
worldwide.
• Communications can be protected by
encryption.
• Businesses need to stay up to date with
technological advances.
• When using e-commerce businesses need to
be aware of security risks and protect
consumers' details and ensure privacy.
Investment needs to be made to ensure
technology is current.
• Security and privacy issues may impact the
business' success if it does not have the
correct protection software in place.
 Characteristic of an autocratic leader
• one-way communicator
• makes decisions alone – no employee input.
• does not foster teamwork and relationships.
• limits creativity and innovation.
• Can be effective in time of crisis or when
immediate compliance with rules or
procedures is needed.
Ways to adapt to this style
• centralise some of the decision making in
order to be more efficient and productive.
• begin to communicate with less input from
other stakeholders and parties.
• senior management take more responsibility
for decisions being made.

Advantages
• Directions and procedures are clearly
defined.
• Management can monitor performance as
employees’ roles and expectations are
clearly set out.
• Time is used efficiently, and problems are
dealt with quickly because there is no
discussion or consultation.
Disadvantages
• Ideas are not shared so employees do not get a
chance to develop their skills and they do not
feel valued.
• Job satisfaction deceases resulting in
increased absenteeism and staff turn over.
• ‘us and them’ mentality
• Conflict increases as employees are competing
for management approval.

• A business may implement an Autocratic leadership style in order to quickly and concisely make
decisions pertaining to the future of the company.
• In a cross- cultural setting, there may be communication breakdowns due to language barriers,
educational and cultural differences.
• By eliminating the process of involving employees in the decision-making process, it could
potentially reduce the time to make a decision, reduce misunderstandings within teams and
potential conflicts.
• Employees can then focus on their core roles.

Characteristic of an autocratic leader Ways to adapt to this style

• encourages employees to become actively
involved in the decision-making process.
• degree of decentralised authority
• communication is a two-way process.
• Employees have a need to believe that
their employee cares about their needs.
• listen to team members and take feedback.
• establish rules and guidelines to avoid
misunderstandings.
• provide the group with the knowledge and
skills they need – empowering staff.
• recognise successes to build relationships and
motivation.

Advantages
• Relationships are positives. Employees are
more likely to accept decisions.
• Level of motivation, trust & job
satisfaction is high à lead to improved
employee performance
• Employees have opportunity to acquire more
skills.
• Sharing ideas in work teams leads to
higher level of commitment of employees.
Disadvantages
• The quality of decisions may be poor because
comprises are made.
• Manager’s control may be weakened and
undermined.
• More involvement may lead to conflict.
• An informal system may lead to collapse in
management.
• Not all employees want to contribute.

• A business may implement and participative leadership style to gain two-way communication from
employees from a diverse background.
• This could breed innovation, create feelings of belonging and inclusion among staff and help
retain and reduce staff turnover.
• Businesses encourage employees to become actively involved in the decision-making process and
develop positive relationships with employees with a two-way communication process.
• They can also take advantage of the cultural knowledge, skills and expertise of a diverse
workforce.
 Characteristic of Situational leadership
A situational style is one where a manager uses
the most appropriate behaviours and adapts their
leadership style depending on the situation.
• Manager adapts their style to the situation
• Uses cues, such as:
o The type of task
o The nature of the group and other
factors
• Derived from Hersey and Blanchards Situational
Leadership Theory
Description of Situational leadership
• Managers adapt their actions, methods of
communication and decision making to the
situation.
• Therefore, they are able to utilise
multiple styles as conditions change.
• Managers recognise the strengths and
weaknesses of each style and apply this
knowledge to a work situation or business
challenge.

Advantages
• Flexible and can create
pleasant work environment
for employees.
• Increases awareness of
leader
• Can improve team
cohesiveness as there is
less internal conflict.
Disadvantages
• Focuses on more immediate needs rather than long term needs.
• Can be ineffective in task-orientated environments as the
leader may not be able to be as flexible as needed – forced
to be in telling space.
• Can be difficult to define both emotional and job maturity of
employees.
• Effective response depends on skill level of leader.
• Shift in leadership style may create confusion

It is derived from Hersey and Blanchards Situational Leadership Theory à 4 leadership approaches
Suggests the need to match two key elements appropriately:
1. the leaders leadership style
2. the followers’ maturity or preparedness levels.

1. Telling: Directive & authoritative approach. Leader makes decisions & tells employees what to do.
Telling style works best for leading employees at the M1 level (low competence, low commitment).

2. Selling: The leader is still the decision maker, but he communicates and works to persuade the
employees rather than simply directing them.
Selling style works best for leading employees at the M2 level (low competence, high
commitment).

3. Participating: The leader works with the team members to make decisions together. He supports
and encourages them and is more democratic.
Participating style works best for leading employees at the M3 level (high competence, low
commitment/confidence).

4. Delegating: Leader assigns decision-making responsibility to team members but oversees their
work.
Delegating style works best for leading employees at the M4 level (high competence, high
commitment/confidence).