BSAD 3500 – EXAM #1 REVIEW
Business administration
CHAPTER 1
PROCESS VIEW OF AN ORGANIZATION:
Operations Management – The systematic design, direction, and control of processes that transform inputs into
services and products for internal, as well as external customers.
Process – any activity or group of activities that takes one or more inputs, transforms them, and provides one
or more outputs for its customers
Operation – a group of resources performing all or part of one or more processes
Supply Chain – an interrelated series of processes within and across firms that produces a service or product
to the satisfaction of customers
Supply Chain Management – the synchronization of a firm’s processes with those of its suppliers and
customers to match the flow of materials, services, and information with customer demand
Role of Operations in an Organization:
Process View:
Opposed to viewing an organization as a conglomerate of departments or the firm as a whole, the process view
of the firm provides a much more relevant picture of the way firms actually work. Departments typically have
their own set of objectives, a set of resources with capabilities to achieve those objectives, and managers and
employees responsible for performance. Some processes, such as billing, may be so specific that they are
contained wholly within a single department, such as accounting.
How Processes Work:
,External Customers – a customer who is either an end user or an intermediary (e.g. manufacturers,
financial institutions, or retailers) buying the fire’s finished services or products
Internal Customers – one or more employees of processes that rely on inputs from other employees or
processes in order to perform their work.
External Suppliers – the businesses or individuals who provide the resources, services, products, and materials
for the firm’s short-term and long-term needs
Internal Suppliers – the employees or processes that supply important information or materials to a firm’s
processes
▪ Every process and every person in the organization has customers:
▫ External Customers
▫ Internal Customers
▪ Every process and every person in the organization relies on suppliers
▫ External Suppliers
▫ Internal Suppliers
Nested Process – the concept of a process within a process (e.g. assembly of an engine within the Model-T
assembly process)
,Service and Manufacturing Processes:
Manufacturing Processes – convert materials into goods that have a physical form we call products
Service Processes – a process that does not change the properties of matirals on at least one of the
following five dimensions:
1. Physical Properties
2. Shape
3. Size (e.g. dimensions of lumber)
4. Surface Finish
5. Joining Parts and Materials
Service processes tend to produce, intangible, perishable outputs. For example, the output from the auto loan
process of a bank would be a car loan, and an output of the order fulfillment process of the USPS is the
delivery of your letter. They cannot be held in a finished goods inventory to insulate the process from erratic
customer demands.
Supply Chain View:
*Each activity in a process should add value to the preceding activities; waste and unnecessary cost should be
eliminated.
Core Process – a set of activities that delivers value to external customers
, ▫ Supplier Relationship Process – a process that selects the suppliers of services, materials, and
information and facilitates the timely and efficient flow of these items into the firm
▫ New Service/Product Development Process – a process that designs and develops new services or
products from inputs received from external customer specifications or from the market in general
through the customer relationship process
▫ Order Fulfillment Process – a process that includes the activities required to produce and deliver the
service or product to the external customer
▫ Customer Relationship Process – a process that identifies, attracts, and builds relationships with external
customers, and facilitates the placement of orders by customers, sometimes referred to as customer
relationship management
Support Processes – a process that provides vital resources and inputs to the core processes (accounting,
finance, human resources, management information systems, and marketing) and therefore is essential to the
management of the business
Operations Strategy – the means by which operations implements the firm’s corporate strategy and helps build
a customer-driven firm, links long-term and short-term operations decisions to corporate strategy
Corporate Strategy – provides and overall direction that serves as the framework for carrying out all the
organization’s functions, it specifies the business or businesses the company will pursue, isolates new
opportunities and threats in the environment, and identifies growth objectives. Developing one involves four
considerations:
▪ Monitoring and Adjusting to Changes in the Business Environment (Environmental Scanning)
▫ A process by which managers monitor trends in the environment (e.g., the industry, the
marketplace, and society) and potential opportunities or threats
▪ Identifying/Developing Core Competencies
▫ Taking advantage of what the firm does well, reflects the collective learning of the
company, these include the following:
1. Workforce
2. Facilities
Business administration
CHAPTER 1
PROCESS VIEW OF AN ORGANIZATION:
Operations Management – The systematic design, direction, and control of processes that transform inputs into
services and products for internal, as well as external customers.
Process – any activity or group of activities that takes one or more inputs, transforms them, and provides one
or more outputs for its customers
Operation – a group of resources performing all or part of one or more processes
Supply Chain – an interrelated series of processes within and across firms that produces a service or product
to the satisfaction of customers
Supply Chain Management – the synchronization of a firm’s processes with those of its suppliers and
customers to match the flow of materials, services, and information with customer demand
Role of Operations in an Organization:
Process View:
Opposed to viewing an organization as a conglomerate of departments or the firm as a whole, the process view
of the firm provides a much more relevant picture of the way firms actually work. Departments typically have
their own set of objectives, a set of resources with capabilities to achieve those objectives, and managers and
employees responsible for performance. Some processes, such as billing, may be so specific that they are
contained wholly within a single department, such as accounting.
How Processes Work:
,External Customers – a customer who is either an end user or an intermediary (e.g. manufacturers,
financial institutions, or retailers) buying the fire’s finished services or products
Internal Customers – one or more employees of processes that rely on inputs from other employees or
processes in order to perform their work.
External Suppliers – the businesses or individuals who provide the resources, services, products, and materials
for the firm’s short-term and long-term needs
Internal Suppliers – the employees or processes that supply important information or materials to a firm’s
processes
▪ Every process and every person in the organization has customers:
▫ External Customers
▫ Internal Customers
▪ Every process and every person in the organization relies on suppliers
▫ External Suppliers
▫ Internal Suppliers
Nested Process – the concept of a process within a process (e.g. assembly of an engine within the Model-T
assembly process)
,Service and Manufacturing Processes:
Manufacturing Processes – convert materials into goods that have a physical form we call products
Service Processes – a process that does not change the properties of matirals on at least one of the
following five dimensions:
1. Physical Properties
2. Shape
3. Size (e.g. dimensions of lumber)
4. Surface Finish
5. Joining Parts and Materials
Service processes tend to produce, intangible, perishable outputs. For example, the output from the auto loan
process of a bank would be a car loan, and an output of the order fulfillment process of the USPS is the
delivery of your letter. They cannot be held in a finished goods inventory to insulate the process from erratic
customer demands.
Supply Chain View:
*Each activity in a process should add value to the preceding activities; waste and unnecessary cost should be
eliminated.
Core Process – a set of activities that delivers value to external customers
, ▫ Supplier Relationship Process – a process that selects the suppliers of services, materials, and
information and facilitates the timely and efficient flow of these items into the firm
▫ New Service/Product Development Process – a process that designs and develops new services or
products from inputs received from external customer specifications or from the market in general
through the customer relationship process
▫ Order Fulfillment Process – a process that includes the activities required to produce and deliver the
service or product to the external customer
▫ Customer Relationship Process – a process that identifies, attracts, and builds relationships with external
customers, and facilitates the placement of orders by customers, sometimes referred to as customer
relationship management
Support Processes – a process that provides vital resources and inputs to the core processes (accounting,
finance, human resources, management information systems, and marketing) and therefore is essential to the
management of the business
Operations Strategy – the means by which operations implements the firm’s corporate strategy and helps build
a customer-driven firm, links long-term and short-term operations decisions to corporate strategy
Corporate Strategy – provides and overall direction that serves as the framework for carrying out all the
organization’s functions, it specifies the business or businesses the company will pursue, isolates new
opportunities and threats in the environment, and identifies growth objectives. Developing one involves four
considerations:
▪ Monitoring and Adjusting to Changes in the Business Environment (Environmental Scanning)
▫ A process by which managers monitor trends in the environment (e.g., the industry, the
marketplace, and society) and potential opportunities or threats
▪ Identifying/Developing Core Competencies
▫ Taking advantage of what the firm does well, reflects the collective learning of the
company, these include the following:
1. Workforce
2. Facilities
