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Notes
CIMA Paper E1
Enterprise Operations
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ExPress Notes
CIMA E1 Enterprise Operations
Contents
About ExPress Notes
1. 2. 3. 4. 5. 6. The Global Business Environment
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7 11 15
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2011 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes will be accepted by the ExP Group.
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ExPress Notes
CIMA E1 Enterprise Operations
We are very pleased that you have downloaded a copy of our ExPress notes for this paper. We expect that you are keen to get on with the job in hand, so we will keep the introduction brief.
ExP classroom course students will also have access to various online support materials, including: . The unique ExP & Me e-portal, which amongst other things allows view again of the classroom course that was actually attended. ExPand, our online learning tool and questions and answers database
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2011 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes will be accepted by the ExP Group.
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ExPress Notes
CIMA E1 Enterprise Operations
For people on a classroom course, this is how we recommend that you use the suite of learning materials that we provide. This depends where you are in terms of your exam preparation for each paper.
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2011 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes will be accepted by the ExP Group.
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ExPress Notes
CIMA E1 Enterprise Operations
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Notes
Notes
Notes
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ExPress Notes
CIMA E1 Enterprise Operations
Chapter 1
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2011 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes will be accepted by the ExP Group.
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ExPress Notes
CIMA E1 Enterprise Operations
Technological - changes including hardware, software, e-issues, materials and services. Global communications. Environmental what are the environmental considerations such as recycling, pollution, attitude of the media, customers, etc.
SAMPLE PAGES Free full set from KEY KNOWLEDGE www.facebook.com/theexpgroup Hofstede: international perspectives on culture
Legal - changes and predicted changes to regional (e.g. EU) and national legislation. Regulatory bodies. Changes to employment law. Hofstede looked at international perspectives on culture. He identified five characteristics:
1. Power distance
do cultures accept inferior positions? do people work individually or together via collectivism? how different is the focus on gender roles? do cultures try to reduce uncertainty? what is the attitude to change over time?
2. Individualism
3. Masculinity 4. Uncertainty
5. Long term orientation
Emerging market multinationals.
Previously, many companies located manufacturing facilities in developing countries. Over recent years this has changed with more service business elements being located within developing countries. There has also been an emergence of multinational companies originating from these so called developing countries. For example, the Indian company Tata is now the owner of the UK car manufacturer LandRover.
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CIMA E1 Enterprise Operations
Disadvantages include: Risk with confidentiality Loss of in-house expertise Potential loss of competitive advantage if other companies can outsource to the same entity
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CIMA E1 Enterprise Operations
SAMPLE PAGES Planned Mixed Free market Free full set from everything is allocation of individuals planned by the resources decide how www.facebook.com/theexpgroup government partly by the resources will
There are 3 main types of economic systems:
be utilised
A transition economy is one which is moving from a planned economy to a free market economy.
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ExPress Notes
CIMA E1 Enterprise Operations
Chapter 2
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Low Low
High
SAMPLE PAGES Free full set from KEY KNOWLEDGE www.facebook.com/theexpgroup Corporate Governance
Stakeholder Power Keep satisfied Key players High The separation of ownership and control arises when shareholders who own a company appoint directors to control it.
Shareholders
Appoint Own
Directors
Control
Company
Smaller companies may have the same persons as a shareholder and director. Larger companies will almost certainly have separate shareholders and possibly thousands of shareholders. Corporate governance refers to how a company is governed. i.e. the processes by which a company is controlled and directed. Areas of importance within corporate governance include:
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CIMA E1 Enterprise Operations
Non Executive Directors (NED) directors who are not involved in the day to day activities but who primarily attend board meetings. Remuneration Committee established to avoid directors setting their own remuneration levels. Audit Committee acts as an interface between the board of directors and the external auditors.
Business-government relations in developed and developing economies. In developed countries there is likely to be a higher level of government lobbying present that that which is found in developing countries. Government lobbying is where
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CIMA E1 Enterprise Operations
representatives from individual businesses or business associations meet with the government to discuss or promote certain ideas. Regulation in the national and international context and its impact on the firm.
There are a number of areas of regulation present within the business environment. For example, company legislation.
Country risk
The risk of operating in a particular country. e.g. economic, cultural and political risk.
Political risk
A component of country risk and includes political stability and political corruption.
Country risk is the risk arising from operating or investing in a particular country, with risks relating to matters such as political interference, political stability, the social and economic infrastructure, the culture of the country and its attitude to foreign business. Country risk is a much more general term than political risk and relates to all of the risks of operating or investing in a particular country.
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ExPress Notes
CIMA E1 Enterprise Operations
Chapter 3
Information Systems
Raw data is just a collection of data such as figures. It needs to be processed by way of an information system to provide suitable management information. Information systems can range from a relatively simple Excel spreadsheet through to a sophisticated purpose built database.
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CIMA E1 Enterprise Operations
Good information is ACCURATE using the following pneumonic: Accurate Complete Cost-beneficial Understandable Relevant Adaptable Timely Easy to use
Porters 5 Forces
Information Systems can be used by an organisation to improve its performance and market position. Using Porters 5 Forces model as an illustration: This model examines the role of 5 forces close to an organisation that impact on its ability to make a profit and hence how attractive a particular market or industry is. There are 5 forces as follows:
Entrants
Suppliers
Competition
Customers
Substitute
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1. Threat of substitute products If there are similar products, a customer will be more likely to switch rather than stay with a product when there are price rises (elastic demand). An advanced IS infrastructure could help an organisation identify new innovative substitute products.
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The growth of the internet and advancement of e-relationships has driven the virtual organisation.
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2011 The ExP Group. Individuals may reproduce this material if it is for their own private study use only. Reproduction by any means for any other purpose is prohibited. These course materials are for educational purposes only and so are necessarily simplified and summarised. Always obtain expert advice on any specific issue. Refer to our full terms and conditions of use. No liability for damage arising from use of these notes will be accepted by the ExP Group.
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