Organization

Finance Operations Marketing

The Three Basic Functions of Business

Organizations
Typical Organization Chart

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 Value-added

Inputs
Land Outputs
Labor Transformation or
Capital Conversion Process Goods
Information Services

Feedback

Organization Feedback
Feedback

Conversion System
Value-Added
The term used to describe the difference between the
cost of inputs and the value or price of outputs.
 Transformation Process of a
Canned Food Processor
Inputs Processing Outputs
• Raw vegetables • Cleaning Canned
• Metal sheets • Making cans vegetables
• Water • Cutting
• Energy • Cooking
• Labor • Packing
• Building • Labeling
• Equipment
Transformation Process of a Hospital

Inputs Processing Outputs

• Doctors, nurses • Examination Healthy
• Hospital • Surgery
• Medical Supplies • Monitoring patients
• Equipment • Medication
• Laboratories • Therapy
 Examples of Various Operations
Operations Examples
Goods Producing Farming, mining, construction ,
manufacturing, power generation
Storage/ Warehousing, trucking, mail
Transportation service, moving, taxis, buses,
hotels, airlines
Exchange Retailing, wholesaling, banking,
renting, leasing, library, loans
Entertainment Films, radio and television,
concerts, recording
Communication Newspapers, radio and television
newscasts, telephone, satellites
Types of Transformation Processes
Physical- manufacturing
Locational- transportation
Exchange- retailing
Storage- warehousing
Physiological- health care
Informational-
telecommunications
Psychological-
entertainment
OM Decisions

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Business Functions Overlap

Operations

Marketing Finance