The IT of an organisation can also depend on the scale of its operations. Traditionally licences for software are based on the number of staff using the systems, even small organisations can have 50 (or more) staff members and still be classed as a small organisation. Generally, smaller organisations will have an informal structure and confined to a single site. Whereas Medium organisations may have a more formal procedure which adopts policies and organisational structure to ensure that systems are maintained and compliance is met where necessary. A large scale organisation may have IT as one of the core responsibilities of the organisation as it is likely that some locations may be off site or long distance where remote access is vital. They may also rely heavily on WANs and expanded LANs to ensure that their systems are accessible across the sites available.
Because large and medium size organisations need a leader or manager, they may adopt one of four management styles, the use of these management styles allows the business to maintain contact with its employees.
- Autocratic, where a clear authority is established and decisions are only to be made by strategic or tactical individuals, operational staff may have relatively little power compared to the other management styles however, it may mean that staff may not feel demotivated if something goes wrong because they are not as involved in the organisation compared to the other leadership styles.
- Democratic, is where management is taken by ‘vote’ of opinion and is useful when undertaking projects and allows people with specialisms such as networking and database design to cast their opinions and thoughts on a project.
- Laissez-faire, is where management takes a smaller role and workers are expected to perform as they are needed and let their own ideas and creativity work to the task they are needed for, this should produce more individual work and is not always ideal for companies that do not require more than simple repetitive tasks.
- Paternalistic, is where management will use a paternal view of management and only get involved when needed or when feedback is requested, this has the added advantage of giving the workers both freedom and encouragement, but when help is needed they aren’t far away. Additionally, this gives management the ability to delegate tasks and establish authority without appearing autocratic.
The management of an organisation can greatly depend on the scale and urgency of the work involved in managing IT. Organisations that also have to follow a lot of compliance, such as government offices must also maintain those constraints effectively.
Just In Time is a lean production technique, It involves ordering a product right as it is about to run out, but before the business has to stop manufacture, this allows a business to work effectively when creating a product that requires a lot of parts and accessories.
|Raw Materials||Work in Progress||Finished Goods|
| Bought from suppliers
Supplier may not be able to meet demand Supplier could not raise prices Used in assembly or as ingredients
Parts for assembly|| Not Sellable
Costs business money to make into product May be a slow process
Wine May cost staff hours if long time delays i.e. building houses|| Needs moving for social events
This table shows the disadvantages of holding stock at different levels of the stock control process.
Why hold stock?
- Fundamentally holding stock allows production to take place
- To satisfy customer demand
- As a precaution against delays from suppliers
- It allows efficient production
- It allows for seasonal changes
- It provides buffer between production process
Main influences on Stock
- The need to satisfy demand such as demand influxes or lower commodity prices.
The a need to manage working capital, stock control for example could mean a product is depleted without being replaced.
Risk of losing value, such as the stock market price. Food and vegetables such as flowers may also decrease in value over time.
Low stock levels
- Lower stock holding posts.
- Lower risk of obsolescence.
- Less capital tied up in stock. So the business is more liquid.
- Consistent with operating on lean production.
High stock levels
- Production is always fully supplied so there are never any delays as the product never runs out.
- Potential for lower costs by ordering in larger quantities.
- The business is better able to handle unexpected changes in demand or the need for higher output as they will have the stocks available.
Within any business there are multiple factors that a customer can imprint on to recognise a brand and associate with quality. Businesses can use the customers intuition to their advantage, targeting on the key aspects of a quality product in order to maximise return. Here is a list of the common points a business can tailor in order to maximise their revenue;
- Profitability, Businesses must decide how much profit each product or service should undertake, whether it be a large return or a small one. Customers may be willing to buy a product purely on its premium price point.
- Customer Service, Businesses may wish to place the quality of their product on par with the quality of its customer service. Poor customer service could reflect badly on a quality product and vice versa.
- Competitiveness, Businesses may wish to use pricing in order to undercut the cost of its competitors. Businesses may also want to take on new locations and footfall in order to maximise profitability.
- Supply Chain, Business may cut costs and use cheaper suppliers, however unethical or environmental considerations could be overlooked and come back to haunt businesses later.
- Reliability, A product that is unreliable or prone to failure may mean that customers look elsewhere for new products, defined obsolescence could damage the perceived quality of the product as well, If it were to fail after a certain time because of a weak part, customers may feel frustrated having to buy new ones.
- Brand Image, For some customers a brand could be vital to what product they purchase, If a brand is damaged, it could affect the sales of businesses massively. Some businesses may also struggle to maintain a positive reputation if the business specialises in cheap services, such as transport or hotels and may not be too affected by bad publicity as the cheap price point means the demand for the product does not change (it is inelastic).
- Quality Control could also mean that products are of a constant high quality and should in tern allow a business to work effectively on producing high quality products for the consumer, who will hopefully repeat purchase. Kaizen and Total Quality Management can allow a business to excel at creating a quality product that is lean and high quality as it forces the product to be a standard that the business expects and what the customer wants.
- Brand Awareness, A customer who does not know a product exist may not buy it, additionally any customer who recognises a product may choose to buy it over a generic product because of it. Advertising and promotion can artificially create the connection between the customer and the brand of trust and safety in a product, that this is the product they should buy.