10.

4 HSC TOPIC HUMAN RESOURCES

HSC Business Studies Syllabus Revision Guide Page 1


HSC Business Studies
Syllabus Revision Guide



CONTENTS:
10.1 OPERATIONS .. 2
1. Role of operations management 3
2. Influences 5
3. Operations processes 8
4. Operations strategies 14
5. Operations super summary 23
6. Operations acronyms 25
10.2 MARKETING . 26
1. Role of marketing 27
2. Influences on marketing 30
3. Marketing process 33
4. Marketing strategies 38
5. Marketing super summary 47
6. Marketing acronyms 49
10.3 FINANCE ........ 50
1. Role of financial management 51
2. Influences on financial management 53
3. Processes of financial management 56
4. Financial management strategies 64
5. Finance super summary 70
6. Finance acronyms 73
10.4 HUMAN RESOURCES ..................... 74
1. Role of human resource management 75
2. Key influences 77
3. Processes of human resource management 83
4. Strategies in human resource management 86
5. Effectiveness of human resource management 90
6. Human resources super summary 92
7. Human resources acronyms 95
THE BUSINESS REPORT ............ 96
10.4 HSC TOPIC HUMAN RESOURCES

HSC Business Studies Syllabus Revision Guide Page 2

10.1 HSC Topic: Operations









Outcomes:

The student:
H1 critically analyses the role of business in Australia and globally
H2 evaluates management strategies in response to changes in internal and external influences
H3 discusses the social and ethical responsibilities of management
H4 analyses business functions and processes in large and global businesses
H5 explains management strategies and their impact on businesses
H6 evaluates the effectiveness of management in the performance of businesses
H7 plans and conducts investigations into contemporary business issues
H8 organises and evaluates information for actual and hypothetical business situations
H9 communicates business information, issues and concepts in appropriate formats





The focus of this topic is the strategies for effective operations management in large businesses.
THE BUSINESS REPORT

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1. Role of operations management
All goods and services are the result of deliberate decisions to design, conduct and continually improve
systems of production, i.e. operations management.

Operations management involves planning, organising, co-ordinating and controlling the transformation or
inputs to outputs to meet the requirements of customers. It is about providing products reliably with
consistent quality.

Strategic role of operations management cost leadership, good/service differentiation

As consumers can easily purchase goods from competitors, a competitive advantage must be developed.

To gain a competitive advantage, the following must be addressed:

Cost leadership involves providing consumers with the best value for a relatively low price. Market share is
gained by appealing to price-sensitive customers (those who consider price important) by offering either the
lowest price or the lowest price compared to the value the customer receives.

Cost leadership can also be gained by achieving low operating costs from offering no-frills products using
fewer components and with a limited variety, e.g. Tiger Airways.

Product differentiation involves making a product that has different or unique features which enables a
company to charge a premium and achieve above average returns. The differentiation feature (specialty) can
be associated with design, technology, brand image or after-sales customer service.

The resulting brand loyalty is likely to lower the customers sensitivity to price, i.e. a higher price can be
charged. Brand loyalty can block out competition, who will have to come up with their own unique
differentiating feature. Sometimes a product is differentiated by the owner, e.g. Steve Jobs with Apple.

Basically, higher profitability can be achieved by either:

- Successful differentiation high margins selling lower volumes.
- Successful cost leadership low margins selling high volumes.

Focus or strategy scope determines whether a business uses cost leadership or product differentiation, e.g.
Woolworths uses cost leadership.

A focus strategy involves targeting market segments where competition is weakest so above-average returns
can be made.


Goods and/or services in different industries

Different industries provide very different goods and services. For example, in the school education system,
operations is about what happens between teachers and students. In manufacturing, the operations deal with
the production and assembly tasks carried out by workers in the factory.

Operations management relates to producing goods and services. In big business this can have a much larger
scope, being on a global scale.

Operations may be complex, requiring management of production for many different businesses at the same
time and for multiple goods and services.



THE BUSINESS REPORT

HSC Business Studies Syllabus Revision Guide Page 4

Interdependence with other key business functions

Operations has a flow through affect influencing all aspects of business, e.g. in car manufacturing, staff levels,
training and work schedules need to be determined so quality products are able to be produced without
bottlenecks being created.

This means that the size and organisation of a facility is linked to production levels, which is determined by the
target market size. This, in turn, determines the qualifications and equipment needed to ensure efficiency.

Target market size of facility production levels qualifications and equipment needed

Operations management becomes the core to which all other business functions contribute, i.e. it actually
makes the product.

Suppliers and customers are closely linked to operations management. Finance has to be managed to provide
the funds needed by the suppliers and the employees to help produce the goods. Finance is also essential for
marketing to sell the goods and services.








































THE BUSINESS REPORT

HSC Business Studies Syllabus Revision Guide Page 5

2. Influences
Globalisation, technology, quality expectations, cost-based competition, government
policies, legal regulation, environmental sustainability

Operations management occurs in a dynamic environment, i.e. constant change.

Business that doesnt adapt to change decrease in customers (market share) decrease in profits, e.g.
Coles in the early 2000s compared to Woolworths.

A business must constantly change and respond to the influences of the environment. These influences
include:

1. Globalisation:

Globalisation is a process that is leading to the development of a single world market. Globalisation is the
result of the decrease in communication and transportation costs.

Distances are no longer a barrier for business as governments have deregulated their systems to open their
economies, resources are now global and finance can be easily borrowed from countries like Japan, China and
USA.

Australian businesses can now borrow from overseas and have a global labour force, e.g. over 5,000 Telstra
employees work overseas.

Globalisation has resulted in the development of factories in low wage countries such as Bangladesh, Thailand
and Vietnam. This has enabled businesses to outsource tasks that are low skilled and repetitive.

Outsourcing is where and outside business manufactures a component part or assembles a product for the
operations function, e.g. Jetstar is now employing flight and maintenance crews from Singapore.

Due to globalisation, both the production of goods and the market place where they are sold are global.


2. Technology:

Technology is the knowledge of how things are done concerning both the hardware and software components.

Not keeping up with technology changes, particularly in relation to equipment and operations methods, will
lead to business failure. While new technology wont necessarily lead to a competitive edge, it will prevent loss
of competitiveness, e.g. car manufacturers introducing robotics, Qantas purchasing the A380 as it is more fuel
efficient and carries more passengers.


3. Quality Expectations:

Quality is meeting, or exceeding, a customers expectations.

In the 1980s and 90s, quality was the main focus for operation managers. The Japanese called it lean
production, i.e. decrease costs, ensure that products meet their design specifications and improve every
aspect of the operations process (TQM Total Quality Management).

We now expect products to be of high quality so now the emphasis is on customisation.



THE BUSINESS REPORT

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4. Cost-based Competition:

Cost-based competition is concerned with driving down the costs of warehousing and transportation while
spreading overhead costs.

Business gains cost advantage lowers prices attract customers from competitors, e.g. Woolworths did
this with its warehousing and transportation logistics and gain market share over Coles.

Overhead costs are the ongoing costs of a business, e.g. rent, electricity, wages. When a business is open 24
hours, (e.g. Kmart) overhead costs are spread over a higher inventory turnover.

Cost-based competition does not try to cut costs through low value or low quality, but rather provides
customers with the best value for money. The customers perception of value and quality is very important.


5. Government Policies:

Government policies include regulations, subsidies, grants, taxes and tariffs that encourage or discourage
aspects of the operations function.

Different political parties have different views on important matters, e.g. Gillards Labor government
introduced the Carbon Tax.

It has been government policy to encourage car manufacturers in Australia to develop and manufacture
products towards a greener future ($6.2 billion was given as assistance withdrawn from budget in 2011).

Sometimes when a government sees a product as undesirable, they implement policies against it, e.g. tobacco
packaging regulations and tax increase on pre-mix alcoholic drinks (alco-pops).


6. Legal Regulations:

Legal regulations are the laws that regulate the way things can be done. They are important because of the
potentially dangerous aspects of using equipment.

The Occupational Health and Safety (OH & S) Act of 2000 was put in place to provide a safe working
environment.

Most responsible operations functions go further than OH & S by developing a culture of safety.


7. Environmental Sustainability:

Environmental sustainability is concerned with air, waste, water and environmentally sustainable products and
operations practises. Many operations functions impact on these, therefore strategies must be developed to
reduce their impact.

Customers are now very aware of the need for environmental sustainability and it often sways them to select
one product over another, e.g. Walmart and Orica have already developed strategies to reduce emissions and
are working towards carbon-neutral goals.