Question 1

Examine the figure and explain the function of each department in relation to the role of Operation
Management.

(20 Marks)

Operations management is a field of business concerned with the administration of business

practices to maximize efficiency within an organization. It involves planning, organizing, and
overseeing the organization’s processes to balance revenues and costs and achieve the highest
possible operating profit. An operations manager is tasked with ensuring that the organization
successfully converts inputs such as materials, labor, and technology into outputs in an efficient
manner. Their direct responsibilities include managing both the operations process, embracing
design, planning, control, performance improvement, and operations strategy. Their indirect
responsibilities include interacting with those managers in other functional areas within the
organization whose roles have an impact on operations. Such areas include marketing, finance,
accounting, personnel and engineering……..

One of the reasons for separating business operations into functional areas is to allow each to
operate within its area of expertise, thus building efficiency and effectiveness across the business
as a whole. The essence of the operations function is to add value during the transformation
process: Value-added is the term used to describe the difference between the cost of inputs and
the value or price of outputs. Many factors affect the design and management of operations
systems. Among them are the degree of involvement of customers in the process and the degree
to which technology is used to produce and/or deliver a product or service. The greater the
degree of customer involvement, the more challenging it can be to design and manage the
operation. Technology choices can have a major impact on productivity, costs, flexibility, and
quality and customer satisfaction.  

In general, the key functional areas of a business are the following:

1- ACCOUNTING
2- IS
3- HR
4- MARKETING
5- ENGENEERING
6- FINANCE

Marketing/Sales
Marketing is all about identifying and meeting customer needs. The marketing function also
includes promoting goods and services, determining how the goods and services will be
delivered, and developing a pricing strategy to capture market share while remaining
competitive. They manage relationships with customers and make them aware of the
organization’s desire and ability to satisfy their needs.In today’s technology-driven business
environment, marketing is also responsible for building and overseeing a company’s Internet
presence (e.g., the company website, blogs, social media campaigns, etc.). Today, social media
marketing is one of the fastest growing sectors within the marketing function.

operations must work with marketing to understand the exact wants of a particular group of
customers. It can then design the exact products customers want and create the production
processes to efficiently produce these products. Marketing, on the other hand, must understand
operations’ capabilities, including the types of products it can produce and the limitations of the
production process. Without communication between marketing and operations, the company
may find itself in a situation where it is producing products the customers don’t want

Accounting

Managers need accurate, relevant, timely financial information, and accountants provide
it. Accountants measure, summarize, and communicate financial and managerial information and
advise other managers on financial matters. Accounting is a crucial part of the Finance functional
area. Accountants provide managers with information needed to make decisions about the
allocation of company resources. This area is ultimately responsible for accurately representing
the financial transactions of a business to internal and external parties, government agencies, and
owners/investors. Financial Accountants are primarily responsible for the preparation of
financial statements to help entities both inside and outside the organization assess the financial
strength of the company. Managerial accountants provide information regarding costs, budgets,
asset allocation, and performance appraisal for internal use by management for the purpose of
decision-making.

Finance

Finance plays a chief role in operations management. It is essential to ensure that the
organization’s finance has been utilized properly to carry out major functions such as the
creation of goods or services so that the customer’s needs could be satisfied.
The Finance function involves planning for, obtaining, and managing a company’s funds.
Finance managers plan for both short-term and long-term financial capital needs and analyze the
impact that borrowing will have on the financial well-being of the business. A
company’s finance department answers questions about how funds should be raised (loans vs.
stocks), the long-term cost of borrowing funds, and the implications of financing decisions for
the long-term health of the business.

, and providing funds for operations. 

The human resources (HR) function

HR is responsible for recruiting new employees and ensuring that each vacancy is filled by the
best person for the job and assisting with the continuous professional development of staff. HR
can help this process by monitoring working conditions, having staff welfare policies and
ensuring that company pay rates are fair and competitive.

Today, all employees and employers have legal rights and responsibilities in relation to health
and safety, data protection (which restricts the type of information which can be held on
employees and customers and how it is used) and employment. HR staff must ensure that the
business complies with current laws and stays up to date with legal changes and developments.

The ICT function

Today, even the smallest businesses need someone who understands ICT and what to do if
something goes wrong. This is vital, because the number of crucial business tasks now carried
out on computer and the importance of the data stored in the system mean that any system
failure can be catastrophic.

Above all, ICT is responsible for system security. Making sure that only authorized users have
access to the system, protecting the system against viruses and hackers and ensuring there is a
full back-up system to restore critical data in an emergency is vitally important. Finally, ICT
specialists will help and assist other users – from repairing problems and glitches to advising on
the use of new software or updating the company Intranet. The business website is likely to be
technically maintained by the ICT staff, but the content will normally be devised by marketing
staff – as you will see below.

Managing operations can be a complicated process that requires in-depth knowledge of the
related field. Fortunately, operations management uses similar management tools and techniques,
no matter the industry. Additionally, an Advanced Planning and Scheduling (APS) software such
as Planet Together APS can also help reduce the complexity that comes with operations
management.

all areas still need information and support from each other for the organization to operate
effectively. Constant communication and cooperation is essential for the business to achieve its
aims and objectives. This often means that joint decisions have to be made between departmental
managers, or their staff, to take account of
everyone’s needs.
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