Functional Area 10 Mark Question - examples of Toyota and a small farm business.

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Functional Area 10 Mark Question (January 2010)

Evaluate the consequences for a business you have studied if the functional areas do not operate efficiently.

The functional areas of a business such as Toyota have to operate together in an efficient manner or there will be a variety of negative consequences.

The production function of Toyota needs to work with the marketing function so that when the marketing function is designing an advertising campaign for a new car model they have all the relevant details. Without these details it will be harder to sell the car because customers will not be given a full picture of the new car model. Or the marketing function might include wrong information about the new car. Either of these things will result in a weak advertising campaign, attracting less customers to buy the car and therefore lead to a loss of profit for Toyota. Another consequence could also be damage to Toyota’s reputation due to incomplete information for customers.
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If the finance function did not work effectively with the other functional areas at Toyota then these other departments might over or under spend. If they over spend then the costs to Toyota will increase which will mean less profit. If they under spend then it might result in lower quality output such as a substandard advertising campaign or a lower quality car produced. This could lead to a loss of customers. Or the human resources might under pay employees leading to lower motivation and therefore less productivity.

The most important consequence to Toyota of the ...

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