Question
Refer to the Radeki de Dovnic Manufacturing (RDM) case study (SL/HL paper 1 May 2019).
a. With reference to RDM, describe how changes in operations management altered its relationship with two other business functions.[4]
b. Explain how RDM’s transformation of its manufacturing process from traditional mass production to highly automated production affected theinterests of internal stakeholders.[6]
▶️Answer/Explanation
Ans:
a.PLEASE NOTE: This content is not included in the syllabus for 2024 exams onward. Related parts of this multi-part question may be used.
The shift in operations management from a traditional industrial manufacturing process to an automated process altered its relationship with the following business functions:
Human resources: RDM changed its recruitment from semi-skilled young people who had just completed their education at a local technical secondary school to university graduates with degrees in engineering or computer science. This shift almost certainly necessitated a shift in approaches to leadership and motivation.
Marketing: In the process of becoming an automated manufacturing process, RDM fundamentally changed its marketing mix. Though the decision to shift from kerosene stoves was market driven (declining demand), the automated process allows RDM to customize products and make, as in the case of the aluminum water bottles, wholly new products.
Accounting and Finance: Prior to automation, RDM made uniform products on a large scale. Pricing decisions would have been relatively rare – setting a fixed price for a product. Now that the business is making customized products, pricing decisions have to be made with virtually every order, which involves people from the accounting department. Whereas RDM had capital expenditures prior to full automation, it also had substantial revenue expenditures in the form of payroll.With automation, the mix of capital versus revenue expenditures shifted in the direction of more capital expenditures. This shift requires significantly different approaches to finance.
Candidates should name the functions, but they can be implicit.
N.B. R&D is not a business function.
Accept any other relevant changes.
Mark as a 2 + 2.
Award [1] for an appropriate business function identified and an additional [1] for some description of changes in context. Award a maximum of [2] for each function described.
b.
Refer to Paper 1 markbands for May 2016 forward, available under the “Your tests” tab > supplemental materials.
Employees – jobs will change, different skills, highly trained engineers and computer scientists.
Managers – tasks will change, management role different.
Shareholders – may have sacrificed dividends for investments but reaped benefits later.
Accept any other relevant internal stakeholders.
Marks should be allocated according to the paper 1 markbands for May 2016 forward section A.
Award a maximum of [3] for a theoretical answer, or for only considering one internal stakeholder.
Award a maximum of [5] if the answer is mainly descriptive but in context.
Award a maximum of [6].