2.1 The value of business functions
In philosophical and ethical terms, value may be a fairly complicated and debate-worthy topic, but within organisations it is, in essence, relatively simple. It is the attempt to transform processes and products to improve their worth and benefit to organisational stakeholders. However, within this comparatively straightforward definition, there is much variation in practice. Concretely achieving this shared goal requires an understanding of the various parts of the organisation, as well as being open to the possibilities of alternative ways of achieving organisational value.
This course looks at three functions in depth for this purpose – operations management, financial accounting, and business intelligence. The reason is that these three functions play a vital part in creating, sustaining, and expanding value, especially in a modern context, as they are constantly being innovated to meet new business and societal challenges. Operations management focuses on the design, implementation, and improvement of those processes and systems that create an organisation’s ultimate goods and services. The financial accounting function concentrates on the collection and allocation of financial resources to serve the needs of the organisation and ensure its fiscal viability. Business intelligence concentrates on how to collect and use information in a way that optimises an organisation’s value.
Crucially, while almost every organisation relies on these functions, how they do so can differ significantly. Value creation depends on understanding the key strengths and goals of the organisation, and then how its diverse functions can contribute to these value ends. In this respect, organisations must identify their core competencies – those things that they do best – and develop these across their organisation in ways that best reflect their value creation objectives.