Chapter 1:
Business Functions and Business Processes
Answers to End-of-Chapter Exercises
QUESTION 1
Sample Answer
A business function is a business "activity,” such as sales order processing, production
scheduling, cash-flow management, and recruiting personnel.
Business functional areas have more than one business function. For example, the
Marketing functional area includes sales order processing and other functions.
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. People who work in each activity must work together
to make a 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.
Managers try to think in terms of processes, rather than discrete activities. The activities in
a process can be done efficiently or not efficiently. Doing them efficiently requires attention
to sharing information between the functional areas. Lack of sharing, or poor sharing,
results in inefficiency. Promoting efficiency thus implies thinking of the activities as part of
an ongoing process.
Preparation and Grading Guidelines
,Students should see functions as isolated business activities. Students should see that
processes are a series of related activities. There are a number of examples of business
activities and processes in the first part of the chapter for the student to cite.
A functional area is not the same thing as a business process. Students should not equate
the two.
In discussing the need to think about processes, the student should (1) see the need to
coordinate activities across functional areas and (2) share information in order to do this
efficiently.
, QUESTION 2
Sample Answer
M&S SCM Acct&Fin HR
Advertisements, Getting your mom to Keeping track of Getting your friends
catchy flyers, word- buy lemons and money in and money to work for you
of-mouth, signs sugar to your mother for
supplies
Asking customers Unpacking the Watching for sales Showing them how
what they want groceries from the to make the
car and filling your lemonade and take
stand money when selling
Refunding any Carrying groceries Creating a Giving them a salary
glasses that don’t from the car; riding spreadsheet to of a few dollars per
taste good your bike to the ensure you’re hour or a cut of the
store for more making a profit profits
supplies
Knowing which After looking at your Using your savings Free lemonade
houses got lemonade forecast, deciding for start-up funds
flyers (not giving when to make and ensuring you’re
them multiple flyers) batches of lemonade not over budget.
Avoiding any cash
shortages
Predicting your sales Mixing the lemonade Clean source of
over the next month water
Flyers in mailboxes; Cleaning your
signs in yard equipment and
putting it away every
evening
Preparation and Grading Guidelines
, Answers will vary here, depending on the student’s creativeness and whether or not they
ever tried to sell lemonade.
QUESTION 3
Sample Answer
1. Ticket sales data flows from Marketing and Sales to Accounting and Finance
2. Cost and profit analysis flows from Accounting and Finance to Marketing and Sales
to ensure the company is making a sufficient profit
3. In addition, customers may send their payments into Accounting and Finance (most
likely pay by credit card). Accounting and Finance needs to notify Marketing and
Sales if there is a customer with bad credit.
Preparation and Grading Guidelines
There are examples of Marketing - Accounting data sharing in the chapter, in the lemonade
stand example and in the immediately following discussion.
Students should be able to succinctly state an example, the purpose and the data shared, as
shown in the samples above.
Business Functions and Business Processes
Answers to End-of-Chapter Exercises
QUESTION 1
Sample Answer
A business function is a business "activity,” such as sales order processing, production
scheduling, cash-flow management, and recruiting personnel.
Business functional areas have more than one business function. For example, the
Marketing functional area includes sales order processing and other functions.
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. People who work in each activity must work together
to make a 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.
Managers try to think in terms of processes, rather than discrete activities. The activities in
a process can be done efficiently or not efficiently. Doing them efficiently requires attention
to sharing information between the functional areas. Lack of sharing, or poor sharing,
results in inefficiency. Promoting efficiency thus implies thinking of the activities as part of
an ongoing process.
Preparation and Grading Guidelines
,Students should see functions as isolated business activities. Students should see that
processes are a series of related activities. There are a number of examples of business
activities and processes in the first part of the chapter for the student to cite.
A functional area is not the same thing as a business process. Students should not equate
the two.
In discussing the need to think about processes, the student should (1) see the need to
coordinate activities across functional areas and (2) share information in order to do this
efficiently.
, QUESTION 2
Sample Answer
M&S SCM Acct&Fin HR
Advertisements, Getting your mom to Keeping track of Getting your friends
catchy flyers, word- buy lemons and money in and money to work for you
of-mouth, signs sugar to your mother for
supplies
Asking customers Unpacking the Watching for sales Showing them how
what they want groceries from the to make the
car and filling your lemonade and take
stand money when selling
Refunding any Carrying groceries Creating a Giving them a salary
glasses that don’t from the car; riding spreadsheet to of a few dollars per
taste good your bike to the ensure you’re hour or a cut of the
store for more making a profit profits
supplies
Knowing which After looking at your Using your savings Free lemonade
houses got lemonade forecast, deciding for start-up funds
flyers (not giving when to make and ensuring you’re
them multiple flyers) batches of lemonade not over budget.
Avoiding any cash
shortages
Predicting your sales Mixing the lemonade Clean source of
over the next month water
Flyers in mailboxes; Cleaning your
signs in yard equipment and
putting it away every
evening
Preparation and Grading Guidelines
, Answers will vary here, depending on the student’s creativeness and whether or not they
ever tried to sell lemonade.
QUESTION 3
Sample Answer
1. Ticket sales data flows from Marketing and Sales to Accounting and Finance
2. Cost and profit analysis flows from Accounting and Finance to Marketing and Sales
to ensure the company is making a sufficient profit
3. In addition, customers may send their payments into Accounting and Finance (most
likely pay by credit card). Accounting and Finance needs to notify Marketing and
Sales if there is a customer with bad credit.
Preparation and Grading Guidelines
There are examples of Marketing - Accounting data sharing in the chapter, in the lemonade
stand example and in the immediately following discussion.
Students should be able to succinctly state an example, the purpose and the data shared, as
shown in the samples above.
