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Analyse the effect of globalisation on operations management. - HSC - SSCE Business Studies - Question 27 - 2017 - Paper 1
Question 27
Analyse the effect of globalisation on operations management.
Worked Solution & Example Answer:Analyse the effect of globalisation on operations management. - HSC - SSCE Business Studies - Question 27 - 2017 - Paper 1
Step 1
Role of Operations Management
Answer
Operations management plays a crucial role in defining how a company produces goods and services efficiently in a global context. Key areas of focus include:
- Strategic Role of Operations Management: Globalisation allows firms to strategize operations to take advantage of international markets, optimizing supply chains and production.
- Cost Leadership: Companies may leverage lower labor and production costs in different countries to maintain a competitive edge.
- Goods/Services Differentiation: Globalisation enables firms to tailor products for diverse markets, addressing local consumer preferences.
- Interdependence with Other Key Business Functions: Operations management must work closely with marketing, finance, and human resources to navigate global challenges.
Step 2
Global Factors
Answer
Several global factors influence operations management:
- Global Sourcing: Firms can source materials and services from around the globe, potentially reducing costs and improving quality.
- Economies of Scale: Operating on a global scale can lead to significant cost savings through bulk purchasing and streamlined production processes.
- Technology and Learning: Access to international markets encourages innovation, maximizing efficiency and improving processes.
Step 3
Challenges and Considerations
Answer
While globalisation offers numerous opportunities, it also presents challenges:
- Cultural Differences: Operations management must adapt to cultural variations that affect consumer behavior and employee relations.
- Regulatory Environment: Companies must navigate different regulatory landscapes, which can impact operational efficiencies.
- Supply Chain Complexity: Global sourcing increases complexity in logistics and supply chain management, necessitating robust strategies to mitigate risks.