When entrepreneurs manage businesses well, they control the following functions: production, marketing, finance, personnel (also known as Human resources) and general management.

They can be a sole proprietor, partnership, close corporation, company, or cooperative society.

Human Resources / People MarketingWhat it does:Responsible for all aspects of managing the people who work in a business.Main activities:Organise hiring employees (recruitment)Set up and manage employment rulesOrganise employee training & appraisalMonitor the working conditions for employeesManage communication with staffEnsure business complies with employment-related legislation

What it does:Responsible for understanding the needs and wants of customersMain activities:Research into the marketNew product developmentDevelopment and delivery of promotional campaignsSetting and monitoring pricesEnsuring suitable distributionObtaining and auctioning customer feedback

Production / Operations Accounts / Finance

What it does:Organises the transformation process that turns inputs (e.g. materials, people) in finished goods and servicesMain activities:Organising suitable method of productionControlling the use of inputs to produce efficientlyManaging the quality of finished output

What it does:Manages the financial resources of the business and reports on the financial position & performanceMain activities:Allocating and monitoring the use of financial resources through budgetEnsuring business has sufficient cash to enable it to pay its liabilities as they fall dueReporting on financial performanceEnsuring business meets legal requirements re financial reporting

A business is normally organized by its functions, e.g. marketing department, accounts department and so on. This is because being grouped together allows the functions to benefit from specialization and division of labour.

Within some organizations functions are broken down even further to include administration, public relations etc. in addition to the functions above.

Specialization is a wide economic concept that is used to describe the process of separation of various tasks within a system or a firm. Specialization will give each individual a chance to specialize in the area that one is best in.

In all the cases of specialization all the individuals of the system will become very dependent on other units and will be difficult to work outside the specialized systems.

In an organization even though there is division of labour, all departments/ functional parts must work in unison for an efficient organization to take effect.

It therefore means that all functions are linked and there are some times commonality of functions. For example the Production role of an organisation has a direct link to that of marketing. The degree to which products are successfully marketed are directly linked to the demand of the product and hence the production of the product. However the marketing function is also linked to the human resource department and operations.

Large businesses might have a number of businesses within the whole company. This would be coordinated by a Head Office, where all the major decisions are made. This is referred to as CENTRALIZATION.

Other businesses, especially multinationals (see below) will opt for a more decentralised organisation – where the individual businesses within the whole company group, make decisions for themselves. This means that there is more opportunity to react to the changing marketplace (one of the advantages of a small firm).

Office Rules Rule 1: The Boss is always right. Rule 2: If the Boss is wrong, see Rule 1. Those who work get more work. Others get pay, perks, and promotions. If you are good, you will get all the work. If you are really good, you will get

out of it. When bosses talk about improving productivity, they are never talking about

themselves. It doesn’t matter what you do, it only matters what you say you’ve done and

what say you are going to do. Don’t be irreplaceable. If you can’t be replaced, you can’t be promoted. If at first you don’t succeed, try again. Then quit. No use being a fool about it. Following the rules will not get the job done. If it weren’t for the last minute, nothing would get done. Everything can be filed under “Miscellaneous” . In order to get a promotion, you only need to pretend that you know your job. When you don’t know what to do, walk fast and look worried.

Refining the Processes

A method that provides organizations tools to improve the capability of their business processes. This increase in performance and decrease in process variation lead to defect reduction and improvement in profits, employee morale, and quality of products or services.

Use of teams that are assigned well-defined projects that have direct impact on the organization's bottom line. Eg the NHT

Training in "statistical thinking" at all levels and providing key people with extensive training in advanced statistics and project management. These key people are designated “Black Belts.”

Emphasis on the DMAIC approach to problem solving: define, measure, analyze, improve, and control.

A management environment that supports these initiatives as a business strategy.

Philosophy— The philosophical perspective views all work as processes that can be defined, measured, analyzed, improved and controlled. Processes require inputs (x) and produce outputs (y). If you control the inputs, you will control the outputs. This is generally expressed as y = f(x).

DMAIC is a data-driven quality strategy used to improve processes. It is an integral part of a Six Sigma initiative

DMAIC is an acronym for the five phases that make up the process: DEFINE, MEASURE, ANALYZE, IMPROVE AND CONTROL

Define the problem, improvement activity, opportunity for improvement, the project goals, and customer (internal and external) requirements.

Measure process performance. Analyze the process to determine root

causes of variation, poor performance (defects).

Improve process performance by addressing and eliminating the root causes.

Control the improved process and future process performance.

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