Chapter 1:
Business Functions and Business Processes
Another Look
Integrated Information Systems
Responses will vary. The 2008 financial crisis was an “avoidable” disaster caused by
widespread failures in government regulation, corporate mismanagement and heedless
risk-taking by Wall Street, according to the conclusions of a federal inquiry. The commission
that investigated the crisis casts a wide net of blame, faulting two administrations, the
Federal Reserve and other regulators for permitting a calamitous concoction: shoddy
mortgage lending, the excessive packaging and sale of loans to investors and risky bets on
securities backed by the loans.
Source: http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html?_r=0
Integrated Information Systems
Responses will vary. Boeing’s Top 10 suppliers include:
Suppliers Service
HITCO Carbon Composites Provides quality parts for Boeing Commercial Airplanes and
Inc. Integrated Defense Systems.
M.C. Gill Corporation The oldest privately held, continuously operating
manufacturer of fiber reinforced plastics, or advanced
composites, in the world. It is one of the largest producers of
, composite sandwich panels used in aircraft flooring
JWD Machine Produces precision machined parts for the aerospace industry.
Watson's Profiling Has been providing precision machined parts and assemblies
for the aerospace industry since 1958, and has been a supplier
to Boeing for 48 years.
Valiant Machine & Tool Inc. Provides Boeing with large, complex-design build projects,
tooling, and capital equipment for production and spare parts
for programs
GE Global Research Performs R&D with Boeing for the 787 Dreamliner. The 787
Research Program is credited with saving considerable
airplane weight, developing technologies to improve cabin
comfort, as well as improving airplane production flow.
American Semiconductor Inc. Provides pure-play, low-cost semiconductor foundry services
(ASI) for all aspects of wafer fabrication and process development.
Omega Precision Manufactures complex, close-tolerance machined parts for the
aerospace and defense industries.
Woodland Trade Company Provides production parts tooling and assemblies for Boeing
Commercial Airplanes programs.
Harris Environmental Group Helps Boeing to identify environmental risks and understand
rural site regulatory and construction constraints. They also
provide flexible staffing deployment to meet emerging
requirements.
Source: http://www.boeing.com/news/releases/2008/q2/080417b_nr_supplier.html
With a new integrated ERP system, Boeing would be able to react more quickly to demand
increases and would also be able to produce more accurate forecasts.
Exercises
1. Distinguish between a business function and a business process. Describe
how a business process cuts across functional lines in an organization. How
, might a manager organize his or her staff in terms of business processes
rather than functional departments? What benefits would there be with
this type of organization? What challenges would it pose?
A business function is a business "activity,” such as sales order processing,
production scheduling, cash-flow management, and recruiting personnel. A
business process is a collection of activities that takes one or more kinds of input
and creates an output that is of value to the customer.
A business process occurs when a series of activities are performed in more than
one functional area. Making and selling a product to a customer is a process that
involves sales, production, and accounting activities. The people who work in
each activity must work together to make the sale go smoothly - taking the
order, scheduling production, shipping the product, recording data about
production and sales and the ultimate collection of the customer's payment.
Today, business managers try to think in terms of business processes that
integrate the functional areas, thus promoting efficiency and competitiveness.
An important aspect of this integration is the need to share information between
functional areas, and with business partners. ERP software provides this
capability by means of a single common database.
The better a company can integrate the activities of each functional area, the
more successful it will be in today’s highly competitive environment. Integration
also contributes to improvements in communication and workflow. Each area’s
information system depends on data from other functional areas.
1. How could a university organize its business education around business
processes rather than business functions? What would be the benefits to
students?
, Responses will vary. Students could focus on integrating the process involved designing
the following courses: Finance, Marketing, Technology, and Organizational Behavior.
2. Assume your uncle raises bees for honey on his farm. You help him package the
honey and sell it on the Internet. Reproduce Figure 1-1 for this small business
example. Add a one-sentence description for each function as it relates to selling
this artisan honey online.
Marketing and Supply Chain Accounting and Human
Sales Management Finance Resources
Marketing the Purchasing Financial accounting Recruiting and hiring
product of
goods and raw
payments from
materials
customers and
suppliers
Taking sales orders Receiving Cost allocation and Training
control
goods and raw
materials
Customer support Shipping Planning and Payroll
budgeting
Customer Scheduling Cash-flow Free honey
relationship production runs management
management
Sales Harvesting the Government
honey compliance
forecasting
Advertising Hive maintenance
3. Go to the Amazon Web site (http://www.amazon.com), and step through the
process of buying an item without actually purchasing the item. Based on this
experience, describe the flows of information between Marketing and Sales,
Business Functions and Business Processes
Another Look
Integrated Information Systems
Responses will vary. The 2008 financial crisis was an “avoidable” disaster caused by
widespread failures in government regulation, corporate mismanagement and heedless
risk-taking by Wall Street, according to the conclusions of a federal inquiry. The commission
that investigated the crisis casts a wide net of blame, faulting two administrations, the
Federal Reserve and other regulators for permitting a calamitous concoction: shoddy
mortgage lending, the excessive packaging and sale of loans to investors and risky bets on
securities backed by the loans.
Source: http://www.nytimes.com/2011/01/26/business/economy/26inquiry.html?_r=0
Integrated Information Systems
Responses will vary. Boeing’s Top 10 suppliers include:
Suppliers Service
HITCO Carbon Composites Provides quality parts for Boeing Commercial Airplanes and
Inc. Integrated Defense Systems.
M.C. Gill Corporation The oldest privately held, continuously operating
manufacturer of fiber reinforced plastics, or advanced
composites, in the world. It is one of the largest producers of
, composite sandwich panels used in aircraft flooring
JWD Machine Produces precision machined parts for the aerospace industry.
Watson's Profiling Has been providing precision machined parts and assemblies
for the aerospace industry since 1958, and has been a supplier
to Boeing for 48 years.
Valiant Machine & Tool Inc. Provides Boeing with large, complex-design build projects,
tooling, and capital equipment for production and spare parts
for programs
GE Global Research Performs R&D with Boeing for the 787 Dreamliner. The 787
Research Program is credited with saving considerable
airplane weight, developing technologies to improve cabin
comfort, as well as improving airplane production flow.
American Semiconductor Inc. Provides pure-play, low-cost semiconductor foundry services
(ASI) for all aspects of wafer fabrication and process development.
Omega Precision Manufactures complex, close-tolerance machined parts for the
aerospace and defense industries.
Woodland Trade Company Provides production parts tooling and assemblies for Boeing
Commercial Airplanes programs.
Harris Environmental Group Helps Boeing to identify environmental risks and understand
rural site regulatory and construction constraints. They also
provide flexible staffing deployment to meet emerging
requirements.
Source: http://www.boeing.com/news/releases/2008/q2/080417b_nr_supplier.html
With a new integrated ERP system, Boeing would be able to react more quickly to demand
increases and would also be able to produce more accurate forecasts.
Exercises
1. Distinguish between a business function and a business process. Describe
how a business process cuts across functional lines in an organization. How
, might a manager organize his or her staff in terms of business processes
rather than functional departments? What benefits would there be with
this type of organization? What challenges would it pose?
A business function is a business "activity,” such as sales order processing,
production scheduling, cash-flow management, and recruiting personnel. A
business process is a collection of activities that takes one or more kinds of input
and creates an output that is of value to the customer.
A business process occurs when a series of activities are performed in more than
one functional area. Making and selling a product to a customer is a process that
involves sales, production, and accounting activities. The people who work in
each activity must work together to make the sale go smoothly - taking the
order, scheduling production, shipping the product, recording data about
production and sales and the ultimate collection of the customer's payment.
Today, business managers try to think in terms of business processes that
integrate the functional areas, thus promoting efficiency and competitiveness.
An important aspect of this integration is the need to share information between
functional areas, and with business partners. ERP software provides this
capability by means of a single common database.
The better a company can integrate the activities of each functional area, the
more successful it will be in today’s highly competitive environment. Integration
also contributes to improvements in communication and workflow. Each area’s
information system depends on data from other functional areas.
1. How could a university organize its business education around business
processes rather than business functions? What would be the benefits to
students?
, Responses will vary. Students could focus on integrating the process involved designing
the following courses: Finance, Marketing, Technology, and Organizational Behavior.
2. Assume your uncle raises bees for honey on his farm. You help him package the
honey and sell it on the Internet. Reproduce Figure 1-1 for this small business
example. Add a one-sentence description for each function as it relates to selling
this artisan honey online.
Marketing and Supply Chain Accounting and Human
Sales Management Finance Resources
Marketing the Purchasing Financial accounting Recruiting and hiring
product of
goods and raw
payments from
materials
customers and
suppliers
Taking sales orders Receiving Cost allocation and Training
control
goods and raw
materials
Customer support Shipping Planning and Payroll
budgeting
Customer Scheduling Cash-flow Free honey
relationship production runs management
management
Sales Harvesting the Government
honey compliance
forecasting
Advertising Hive maintenance
3. Go to the Amazon Web site (http://www.amazon.com), and step through the
process of buying an item without actually purchasing the item. Based on this
experience, describe the flows of information between Marketing and Sales,
