Interdependence - Operations

A business is a single, organic entity that involves all 4 Key Business Functions simultaneously. 

The artificial separation of a 'whole' business into these functions is only to aid structure and comprehension. 

Understanding business is kind of like colouring in a circle. 

It is hard to do it in a straight-line. It requires back tracking, leaps forward and repeated coverage of the same territory. 

The best way to get this understanding is by clicking on the hyperlinks to other parts of the course that are embedded in the text on each page. By traversing across the full terrain of the course, the development of a 'holistic' business intelligence will gradually emerge.

Here are the main ways that Operations is interdependent with other Key Business Functions:

• Marketing; operations sets the base cost per unit which influences the Pricing strategies of marketing; operations must make the Product / Output (physical or service) as determined by market research and as advertised in Promotion; the quality of service in operations may be used to Promote the product and quality has a direct interaction with Price; distribution (Place) requires operational systems. 

• Human Resources; task design (jobs) dictated by operational processes; skills and qualifications of employees change depending on operational requirements, impacting recruitment, training and separation phases of HR.

• Financial Management; operations costs a lot of money in ongoing expenses (costs) requiring cash (liquidity) to pay for them; the initial purchase of capital equipment requires financing (equity or debt?). If operations fails, the entire business will fail.