1. Topic 2 Business management MANAGEMENT PROCESSES CHAPTER SEVEN
© Cambridge University Press 2012

2. Coordination of the key business
functions
Specialisation is the separation of business functions into four separate ‘key’ business functions to improve efficiency and effectiveness.

3. Coordination of the key business
functions (cont.)
Specialisation makes interdependence necessary.
In SMEs and small businesses, the key business functions overlap as a few individuals will perform multiple functions, and decisions made for one function will affect the others.

4. Operations The creation of a physical good or supply of a service.
Finished goods are sold to final consumers.
Intermediate goods are used by other businesses in their operations.

5. Marketing
The target market is the group of existing customers and potential customers identified using market segmentation:
Geographic – state, city or region where they live.
Demographic – including age and gender.
Psychographic – a person’s lifestyle or personality.
Behavioural – characteristics.

6. Finance
Finance is concerned with acquiring and managing the funds that are needed so that goods and services can be produced.
Two sources of funds available to a business: debt and equity.
Financial reports are used to measure the financial success and stability of the business.

7. Human resources
The human labour used to transform inputs into outputs.
The skills and expertise of a business’s employees is a valuable part of the business that can give it a competitive advantage.
Concerned with the relationships between the employer and the employees of the business:
how they are hired and trained
how they are rewarded
dealing with employees leaving the business.

8. Ethical business behaviour
Behaviour that is considered consistent with the behaviour standards set by society.
Acting honestly in marketing.
Providing value for money.
Promoting social justice.
Being environmentally friendly.
Managers are expected to manage the resources of the business in a responsible manner while considering the potential impacts of their decision on all stakeholders and the environment.