1. 5. Cost control B 5 / 1 BUSINESS ECONOMICS 5 / 6
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2. 5.0 OVERVIEW B 5 / 2 5.1 ADDED-VALUE AND COST CONTROL page B 5 / 3
5.2 INVENTORY MANAGEMENT page B 5 / 4
5.3 TEAMWORK page B 5 / 8
5.4 TOTAL QUALITY MANAGEMENT page B 5 / 15
5.5 INVESTMENT POLICY page B 5 / 22
5.6 EXERCISES page B 5 / 30
5.7 VOCABULARY page B 5 / 32
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3. 5.1 ADDED-VALUE AND COST CONTROL
B 5 / 3
5.1 ADDED-VALUE AND COST CONTROL
minus =
ADDED-VALUE
COMPANIES WANT TO ……………….. ADDED-VALUE TO ……………….. PROFIT
COMPANIES MUST ……………….. TURNOVER AND ……………….. COSTS
PRICING AND COST CONTROL
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4. 5.2 INVENTORY MANAGEMENT B 5 / 4
Frank is managing a snackbar business He is faced with a series of costs related to keeping stocks of ingredients, prepared meals, drinks, …
What are the different types of inventory costs you can think of?
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5. B 5 / 5 Examples of inventory costs Explanation Type of cost
Refrigerators
Ingredients, prepared meals and drinks need to be refrigerated: this generates an electricity cost
Energy costs
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6. B 5 / 6 Examples of inventory costs Explanation Type of cost
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7. B 5 / 7
There are several ways to “keep inventory costs under control”:
Buffer stock:
EOQ (Economic Order Quantity):
JIT (Just In Time):
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8. B 5 / 8
5.3 TEAMWORK
Frank is managing a snackbar business He is heading a team of employees working in the different shops and is assisted by his wife and an accountant for the daily administration Frank believes in teamwork and every employee takes a share of the responsibility and contributes to the business
What are the challenges you can think of in managing a team?
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9. B 5 / 9 T E A M = Together Everyone Achieves More Explain:
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10. B 5 / 10 Belbin Team Role Model Management
Use talents to improving team performance
The Belbin team role model is designed to use the talents and personalities of team members. If you want your team to improve its performance by working together more effective, it is important that you learn to use the psychological diversity in your team to its fullest potential.
Real cooperation is not easy. We all strive for it but difficulties always arise at some point. Between team members there are big differences in style, attitude, temperament and personality. These differences are explained by the Belbin Team Role Model.
Belbin described the behavior that we can recognize when we work together with others. Each team role is actually a strategy in dealing with work and with colleagues. In other words, a favorite style of cooperation that can be seen by working with others. Team roles are the perfect instrument to use these different styles to their fullest potential.
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11. B 5 / 11 Team roles are complementary
A team must consist of different roles to achieve maximum performance. The nine roles are essentially complementary. They complement and reinforce each other, but they can also contradict and compete with each other. A team role says a lot about the style of work of a team member and comes from the personality of the individual.
In practice, we all have two or three team roles that fit us naturally and some that we really do not like.
DO THE TEST:
These are the 9 team roles:
Implementer is the practical organizer within the team. Disciplined, orderly and task-oriented. Implementer puts plans and ideas into easily executable tasks. He/she can be a little too practical and conservative when the usefulness of new ideas is not immediately clear.
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12. B 5 / 12
Resource Investigator is the cheerful, extroverted person with lots of contacts within and outside the team. He/she is enthusiastic, adventurous and open-minded and always looking for new ideas. Resource Investigator is naturally good at developing and maintaining contacts, but may become careless when the novelty wears off.
Plant is the creative thinker of the team. Innovative and original. A free spirit who needs space to fantasize about new and surprising solutions to complex problems. Plant is not always practical and sometimes misses what others require from him/her.
Monitor is sensible, thoughtful and critical. The analyst of the team. He/she is always analyzing situations and wants to get to the bottom of things. As Monitor he/she may deliberate long and thoroughly and his or her judgment is rarely wrong.
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13. B 5 / 13
Shaper is driven, passionate and willful. He/she has a strong urge to perform, looks for challenges and gets things going. Shaper makes sure deadlines are made and goals are met, one way or the other. He/she can get frustrated and react angrily or emotionally.
Coordinator is the natural coordinator of the team. He/she looks after procedures, helps team members clarify intentions and summarizes what everyone wants. He/she has a nose for talent and knows how to utilize people to their full potential. Coordinator trusts others and delegates easily but sometimes has a tendency to leave too much work to others.
Completer Finisher has the talent to always feel what could go wrong. This leads to a lot of attention to details, checking and rechecking, and a tendency to perfectionism. He/she monitors the quality and safety, but can sometimes be overprotective and find it difficult to delegate things to others.
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14. B 5 / 14
Teamworker is the most sensitive member of the team, helpful, accommodating and focused on creating a pleasant atmosphere and sense of togetherness. He/she prefers balance and harmony and is close to others. Teamworker has difficulty with conflict and may have trouble taking decisions at critical times.
Specialist is an immeasurable source of knowledge in his/her field. An advisor who is gladly consulted and will provide knowledge on a specific topic with pleasure and ease. His/her contributions to the team are his/her substantial knowledge and technical skills. Specialist thrives less well when working together and does not care for social activities that much.
SUMMARY:
A team that does not have the ideal composition may run into problems. For example, a team consisting of only creative individuals will generate many ideas, but none of them will be implemented. A team consisting of only experts may lose sight of the big picture. A team will perform better if it is aware of the different roles required to reach a specific goal and is able to include those roles within the team. The last 30 years the interest in team composition has increased.
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Couwenberghe,

15. 5.4 TOTAL QUALITY MANAGEMENT
B 5 / 15
5.4 TOTAL QUALITY MANAGEMENT
Frank is managing a snackbar business He is “producing” and selling food. Quality is essential in hus type of business.
In what different ways may he ensure optimal quality of his products?
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16. B 5 / 16
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17. B 5 / 17
Total Quality Management (TQM) is a management approach that originated in the 1950s and has steadily become more popular since the early 1980s. Total quality is a description of the culture, attitude and organization of a company that strives to provide customers with products and services that satisfy their needs. The culture requires quality in all aspects of the company’s operations, with processes being done right the first time and defects and waste eradicated from operations.
To be successful implementing TQM, an organization must concentrate on the eight key elements:
Ethics
Integrity
Trust
Training
Teamwork
Leadership
Recognition
Communication
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18. B 5 / 18
1. Ethics – Ethics is the discipline concerned with good and bad in any situation. It is a two-faceted subject represented by organizational and individual ethics. Organizational ethics establish a business code of ethics that outlines guidelines that all employees are to adhere to in the performance of their work. Individual ethics include personal rights or wrongs.
2. Integrity – Integrity implies honesty, morals, values, fairness, and adherence to the facts and sincerity. The characteristic is what customers (internal or external) expect and deserve to receive. People see the opposite of integrity as duplicity. TQM will not work in an atmosphere of duplicity.
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19. B 5 / 19
3. Trust – Trust is a by-product of integrity and ethical conduct. Without trust, the framework of TQM cannot be built. Trust fosters full participation of all members. It allows empowerment that encourages pride ownership and it encourages commitment. It allows decision making at appropriate levels in the organization, fosters individual risk-taking for continuous improvement and helps to ensure that measurements focus on improvement of process and are not used to contend people. Trust is essential to ensure customer satisfaction. So, trust builds the cooperative environment essential for TQM.
4. Training – Training is very important for employees to be highly productive. Supervisors are solely responsible for implementing TQM within their departments, and teaching their employees the philosophies of TQM. Training that employees require are interpersonal skills, the ability to function within teams, problem solving, decision making, job management performance analysis and improvement, business economics and technical skills. During the creation and formation of TQM, employees are trained so that they can become effective employees for the company.
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20. B 5 / 20
5. Teamwork – To become successful in business, teamwork is also a key element of TQM. With the use of teams, the business will receive quicker and better solutions to problems. Teams also provide more permanent improvements in processes and operations. In teams, people feel more comfortable bringing up problems that may occur, and can get help from other workers to find a solution and put into place.
6. Leadership – It is possibly the most important element in TQM. It appears everywhere in organization. Leadership in TQM requires the manager to provide an inspiring vision, make strategic directions that are understood by all and to instill values that guide subordinates. For TQM to be successful in the business, the supervisor must be committed in leading his employees. A supervisor must understand TQM, believe in it and then demonstrate their belief and commitment through their daily practices of TQM. The supervisor makes sure that strategies, philosophies, values and goals are transmitted down through out the organization to provide focus, clarity and direction. A key point is that TQM has to be introduced and led by top management. Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company and in creating and deploying well defined systems, methods and performance measures for achieving those goals.
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21. B 5 / 21
7. Communication – It binds everything together. Starting from foundation to roof of the TQM house, everything is bound by strong mortar of communication. It acts as a vital link between all elements of TQM. Communication means a common understanding of ideas between the sender and the receiver. The success of TQM demands communication with and among all the organization members, suppliers and customers. Supervisors must keep open airways where employees can send and receive information about the TQM process. Communication coupled with the sharing of correct information is vital. For communication to be credible the message must be clear and receiver must interpret in the way the sender intended.
8. Recognition – Recognition is the last and final element in the entire system. It should be provided for both suggestions and achievements for teams as well as individuals. Employees strive to receive recognition for themselves and their teams. Detecting and recognizing contributors is the most important job of a supervisor. As people are recognized, there can be huge changes in self-esteem, productivity, quality and the amount of effort exhorted to the task at hand. Recognition comes in its best form when it is immediately following an action that an employee has performed.
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Couwenberghe,

22. B 5 / 22
5.5 INVESTMENT POLICY
Frank is managing a snackbar business Apart from his new shop, Frank did important investments in recent years and will surely be faced with new investments if he wants to further grow his business
What are the different types of investments you can think of?
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23. B 5 / 23 Examples of investments Explanation Type of investment
Replace refrigerators
Refrigerators have an economic and technical lifespan; they need to be replaced after a certain period
Replacement investments
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24. B 5 / 24
What is cash flow?
And what is the importance for investments?
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25. B 5 / 25 Investment calculation methods Payback time Net Present Value
Explanation
Formula
Advantages
Disadvantages
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26. B 5 / 26
Frank is analyzing 2 price offers for a new oven Offer 1: investment of € 9.000, yearly cash flow of € 2.300, timespan 5 years, residual value 10% Offer 2: investment of € , yearly cash flow of € 3.500, timespan 5 years, residual value 10% He expects a ROI of 10%
Use the 2 calculaton methods to help Frank choose the best offer!
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27. B 5 / 27 Calculation method 1: Copyright Mark Van
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28. B 5 / 28 Calculation method 2: Copyright Mark Van
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29. B 5 / 29 What is your recommendation to Frank?
There is a 3rd calculation method: “IRR” (Internal Return Rate)
Explain:
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30. B 5 / 30
5.6 EXERCISES
Select and contact a SME in your neighborhood and conduct an interview with the management on their:
Inventory management
Teamwork
Total quality management
Write-down a summary on this page and the following page:
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Couwenberghe,

31. B 5 / 31
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32. B 5 / 32
5.7 VOCABULARY EN NL
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33. B 5 / 33 EN NL
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34. B 5 / 34 EN NL
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