ASSIGNMENT 2 FRONT SHEET

Qualification BTEC Level 4 HND Diploma in Business

Unit number and title Unit 4: Management and Operations (488)

Submission date October 24, 2018 Date received (1st submission) October 24, 2018

Re-submission date Date received (2nd submission)

Student name Nguyen Hoang Hiep Student ID GBH17298

Class GBH0701 Assessor name Nguyen Thuy Linh

Student declaration
I certify that the assignment submission is entirely my own work and I fully understand the consequences of plagiarism. I
understand that making a false declaration is a form of malpractice.
Student’s signature: Hoang Hiep

Grading grid
P4 P5 P6 M3 M4 D2

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Table of Contents
Introduction ........................................................................................................................................ 4
P4. Explain the key approaches to operations management and the role that leaders and managers
play. .................................................................................................................................................... 4
P4.1 Discuss the key theories of operations and operations management including: six sigma, lean production
and queuing theory. ..................................................................................................................................... 4
a. The Six Sigma ............................................................................................................................................... 4
b. The Lean Production.................................................................................................................................... 5
c. Queuing Theory ........................................................................................................................................... 6
P4.2 Explain different operations management approaches. ......................................................................... 7
a. Management by objectives (MBO).............................................................................................................. 7
b. Principle of Total Quality Management and the concept of Kaizen. .......................................................... 8
c. Just in time inventory .................................................................................................................................. 9
P4.3 Make appropriate application to the Ashley Furniture Inc. ................................................................... 10
P5. Explain the importance and value of operations management in achieving business objectives. ... 11
P5.1 Discuss the following operational functions of a business. ................................................................... 11
a. Process design ........................................................................................................................................... 11
b. Scheduling ................................................................................................................................................. 11
c. Logistics and inventory management ....................................................................................................... 11
d. Distribution management system ............................................................................................................. 12
e. Capacity management ............................................................................................................................... 12
P5.2 3 functions to give specific application to Ashley Furniture Inc. ............................................................ 12
P5.3 How the good management of these operational functions would help the company to obtain its
business’ objectives. ................................................................................................................................... 13
P6. Assess the factors within the business environment that impact upon operational management
and decision-making by leaders and managers................................................................................... 14
P6.1 Business environment (Industry analysis) ............................................................................................ 14
a. Porter’s Five Force Model ......................................................................................................................... 14
b. Concisely to the furniture industry ........................................................................................................... 15
c. The key forces affecting the operational management and decision making. ......................................... 15
P6.2 Pressures from stakeholders ............................................................................................................... 16
a. The concept of stakeholder ....................................................................................................................... 16
b. A current issue that the whole furniture industry in general is facing. .................................................... 16
c. Discuss the pressures relating to the issue from different stakeholder groups on the management and
leadership roles of the company........................................................................................................................ 16
P6.3 How leaders and managers can meet the key stakeholders’ expectations and reduce the pressures by
becoming a corporate entrepreneur and encouraging intrapreneurship. ...................................................... 17
Conclusion ......................................................................................................................................... 18
References ........................................................................................................................................ 19

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 Introduction
This assignment is demonstrating the profound understanding on the concept of operations as both
a function and a process which all organization must adopt to conduct business. Besides, this assignment
also encourages learners to clearly and specifically differentiate the application of leadership and
management in different contexts.

P4. Explain the key approaches to operations management and the

role that leaders and managers play.
P4.1 Discuss the key theories of operations and operations management
including: six sigma, lean production and queuing theory.
Operations management involves transforming inputs efficiently and effectively into outputs
valued by the end consumer in producing or service environments. There are 3 key theories of operations
management: six sigma, lean production and queuing theory.
a. The Six Sigma
The Six Sigma a technique that provides organizations with tools to enhance the capability of their
business processes. This increase in performance and reduce in process variation cause defect reduction
and improvement in profits, employee morale, and quality of merchandise or services (The Global Voice
of Quality, 2018). It is a measurement-based approach that focuses on method improvement and variation
reduction through the application of Six Sigma improvement projects. Unnecessary variation in how a
process is enforced can result in significant delays and poor quality of selections and outputs (United
States Environmental Protection Agency, 2018). This is accomplished through the use of two Six Sigma
sub-methodologies: DMAIC and DMADV. The Six Sigma DMAIC process: define, measure, analyze,
improve, control. it is an improvement system for existing processes falling below specification and
searching for progressive improvement. The Six Sigma DMADV process: define, measure, analyze,
design, verify. the process is an improvement system used to develop new processes or products at Six
Sigma quality levels. It may also be used if a current process needs more than just progressive
improvement (iSixSigma, 2018). Six Sigma focuses on reducing process variation and enhancing process
management, whereas lean drives out waste and promotes work standardization and flow. Six Sigma
practitioners should be well versed in both.

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 b. The Lean Production
Lean Production is an integrated set of activities designed to attain high-volume production using
minimal inventories (Educational Business Articles, 2018). The goal of lean is to eliminate waste or the
non-value-added parts in any process. Unless a process has gone through lean multiple times, it contains
some part of the waste. when done correctly, lean can produce large enhancements in efficiency, cycle
time, productivity, material prices, and scrap, leading to lower prices and improved competitiveness.

There are 7 types of waste in lean production:

The most serious of all of the seven wastes; the waste of overproduction is creating too much or
too early. this is actually because of operating with large batches, long lead times, poor provider relations
and a number of different reasons. Overproduction leads to high levels of inventory which mask many of
the problems at intervals organization. The aim should be to create only what is needed once it is needed
by the client, the philosophy of Just in Time (JIT).
Spending an infinite quantity of time looking forward to things in working lives, this is an obvious
waste. The waste of waiting time disrupts the flow, one of the main principles of lean manufacturing, as
such it is one amongst the additional serious of the seven wastes or 7 kinds of lean manufacturing.
Transport adds no value to the merchandise, a business is paying people to move material from one
location to another, a method that only prices the cash and makes nothing for the business. The waste of
transport is often a very high price to the business, they have individuals to work it and equipment like
trucks or fork trucks to undertake this valuable movement of materials.
Stock prices cash, every piece of product bound in material, work in progress or finished product
has a value and until it is truly sold that value is the company. Additionally, to the pure value of the
inventory, it adds several different costs; inventory feeds several different wastes. Inventory has to be
kept, it wants area, it desires to package and it has to be transported around. It has the prospect of being
damaged during transport and becoming obsolete. The waste of Inventory hides several of the other
wastes within the systems.
Unnecessary motions are those movements of man or machine that are not as small or as simple
to attain as possible and retrieve heavy objects at floor level once they could be fed at waist level to cut
back stress and time to retrieve. All of these wasteful motions value time, money and cause stress on staff
and machines, after all, even robots wear out.

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 The waste of over processing is where people use inappropriate techniques, large equipment,
working to tolerances that are too tight, perform processes that are not needed by the customer and so
forth. All of these things cost time and money.
c. Queuing Theory
Queuing theory is the study of queues, otherwise called waiting lines (Business Jargons, 2018).
Queuing theory deals with issues that involve waiting. Queues are a typical everyday experience. Queues
form as a result of resources are limited. The queuing theory applies to those situations where a consumer
comes to a service station to avail the services and wait for occasionally before availing it and then leave
the system after obtaining the service. The waiting lines are shaped because of the inefficiency of the
service system to render immediate services to the customer when they arrive. If the client has to wait for
a long duration, it might cause the frustration among them, the goodwill would possibly get damaged,
direct value of idle server. Therefore, the ultimate goal of the queuing theory is to attain an economic
balance between value of translation services and also the cost related to the waiting time. There are 3
basic elements in queuing theory: Customers, queue, and service channels.
The arrival of customer is one random note that is taken into consideration. The manner within
which individuals arrive is random, and between adjacent intervals as well, there are certain random
arrivals. This arrival is also in a single set or maybe a bulk and thus has to be counted in terms of the
probability distribution. This system is additionally also called the arrival pattern. There are 2 systems that
require to be considered within the total range of customers: Open system and Closed system.
The number of individuals that are taken into thought when they are standing in a line waiting to
be served is understood as the forming of a queue. This process of waiting to be served is known as
queuing up. There are 2 vital aspects of the queue that includes: Queuing discipline and maximum size.
Maximum size implies a complete range of consumers who are waiting within the queue to be served.
Queuing discipline has certain features related to it, and may be outlined as the manner within which a
queue is organized. The priority queue is that where people having priority relating to obtaining their
service is allowed. In this case, given that each individual is prioritized, those with a lower priority get
served later than those with a better priority. Serve in random order implies that class in which people
come in haphazardly requesting service, and they are provided service in that manner Last come first out
implies that system where people that come in at the last moment are also served within the best manner
and first-hand. first in first out is that usual technique that is followed that ensures those customers who
have come first should be served on a first-hand basis. there is another aspect where customers can take

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part in any queue, and they have a source in an infinite set. Also, in this queuing system, peculiar human
behavior has been noticed. when any individual after waiting in queue loses his patience, he leaves that
queue, and it is known as reneging. When people from a bigger queue join into a smaller queue, it is called
jockeying. Also, if people do not decide to enter any queue because of their personal reasons, it is called
balking.
Providing service is that time which is taken as the amount for which customers had to attend
before obtaining the final service. this might both involve that period, for which they had to wait as well as
an amount once they were being served. It is additionally taken as a random instead of having any
specified system. The output that is provided is taken to be the mode in which clients leave a specific
system after they have been served. although in most cases, it is ignored, but in certain cases, there is the
process of facility where served customers again enter the system to get served for some alternative
process. Once these factors are well understood, and complete analysis is created in regards to them, it
will be found that how many resources are to be allocated to every party and what would be the result of
that.
P4.2 Explain different operations management approaches.
a. Management by objectives (MBO)
Management by Objectives (MBO) is a personnel management method where managers and
staffs work along to set, record and monitor goals for a particular amount of time (Levinson, 2003).
Business goals and planning flow top-down through the organization and are translated into personal goals
for employees. The core concept of MBO is planning, which implies that a company and its members are
not just reacting to events and issues but are instead being proactive. MBO needs that employees set
measurable personal goals based upon the organizational goals. MBO is a supervised and managed
activity so all of the individual goals will be coordinated to work towards the overall company goal.
SMART goals are Specific, Measurable, Attainable, Realistic, and Time-bound. They’re sort of a
text roadmap that creates it simple to pinpoint what the company want and specifically when and the way
the company proposes to get it (Wayne State University, 2018).
Specific is the What, Why, and How of the S.M.A.R.T. model. The goal should target a particular
area of improvement or answer a specific and simplistically written and clearly outline what the corporate
is going to do (Wayne State University, 2018).
Goals should be measurable in order that the company has tangible proof that the company has
accomplished the goal. Usually, the whole goal statement is a measure for the project, however, there are

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typically many short-term or smaller measurements designed into the goal, according to Wayne State
University (2018).
Goals should be achievable; they should stretch employees slightly, therefore, they feel challenged,
however, outlined well enough so that they'll be able to reach them (Wayne State University, 2018). They
must possess suitable information, skills, and abilities required to attain the goal. They can meet most any
goal when they set up their steps wisely and establish a timeframe that permits they to carry out those
steps. As they perform the steps, they can achieve goals that may have appeared impossible when they
started. On the other hand, if a goal is impossible to attain, they may not even attempt to accomplish it.
Accomplishable goals inspire staff. Impossible goals demotivate them.
Goals should live outcomes, not activities.
Goals should be connected to a timeframe that makes a sensible sense of urgency or ends up in
tension between the present reality and the vision of the goal. without such tension, the goal is unlikely to
provide a relevant outcome (Wayne State University, 2018).
b. Principle of Total Quality Management and the concept of Kaizen.
Total Quality Management (TQM) describes a management approach to long-run success
through consumer satisfaction. In a TQM effort, all members of a corporation participating in rising
processes, products, services, and the culture within which they work (The Global Voice of Quality,
2018). Many firms have wallowed in a repetitive cycle of chaos and client complaints. They believe that
their operations are just too large to effectively manage the amount of quality. The first step within the
TQM process, then, is to understand there is an issue and that it can be controlled. If the process is
inflicting issues, it won’t matter how many times the businesses rent new staff or how many coaching
sessions they place them through. Correct the process so train their individuals on these new procedures. If
managers simply patch over the underlying issues within the process, they will never be ready to totally
reach the potential. Everybody within the company should understand that they have a crucial part to play
in making certain high levels of quality in their merchandise and services. Everybody has a client to
please, and that they should all improve and take responsibility for them. A high-quality management
system is only effective when organizations can quantify the results. They have to determine how the
process is enforced and if it is having the required impact. This may help them set their goals for the
longer term and make sure that each department is functioning toward the identical result. Total Quality
Management is not something that may be done once then forgotten. It is not a management part which

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will finish after an issue has been corrected. Real enhancements should occur of times and frequently so as
to extend client satisfaction and loyalty. Lastly, quality management is not a quick fix.
Kaizen is a management technique that originated in Japan and was nonmoving within the
classical Japanese philosophy and concepts. It’s truly supported an idea that was not specifically meant for
the business world and truly precedes it. The literal translation of the term from Japanese is ‘positive
change’ or ‘change for the better’ as ‘kai’ means ‘change’ and ‘zen’ means ‘good’ (Shmula, 2018). It was
developed within the producing sector to lower defects, eliminate waste, boost productivity, encourage
employee purpose and responsibility, and promote innovation.
One of the most powerful lean producing tools and a cornerstone of any successful implementation
is that of 5S. 5S is an easy tool for organizing your workplace in a clean, efficient and safe manner to
boost your productivity, visual management and to make sure the introduction of standardized working
(Lean Manufacturing Tools, 2018). It includes Seiri, Seiton, Seiso, Seiketsu and Shitsuke.
Seiri or Sort is the first step in 5S, it refers to the sorting of the litter from the other things inside
the work area that are literally required. This stage needs the team to remove all things that clearly do not
belong within the working area and only leave those that are needed for the processes in question.
Seiton or Straighten is the method of taking the desired things that are remaining after the removal
of litter and composition them in an economical manner through the employment of engineering
principles and making certain that every item has a place which everything is in its place.
Seiso or Sweep is the thorough cleaning of the area, tools, machines and different equipment to
make sure that everything is coming back to a nearly new status. this will make sure that any non-
conformity stands out; like an oil leak from a machine onto a bright, recently painted clean floor.
Seiketsu or Standardize is the process of making certain that what people have done inside the first
three stages of 5S become standardized that is people make sure that people have common standards and
ways of working. standard work is one of the most necessary principles of Lean producing.
The final stage is Shitsuke or Sustain, making certain that the corporate continues to continually
improve using the previous stages of 5S, maintain housekeeping, and conduct audits and so forth. 5S
ought to become a part of the culture of the business and the responsibility of everyone within the
organization.
c. Just in time inventory
Just-in-time inventory is a list strategy that makers use to extend potency (The Balance Small
Business, 2018). The process involves ordering and receiving inventory for production and client sales

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only as it is required to provide merchandise, and not before. The just-in-time approach aims to keep only
the minimum quantity of inventory available. New inventory or materials are ordered only if the existing
provider declines to a specific level. Just-in-time inventory management could be a positive cost-cutting
inventory management strategy, although it can also cause stock outs. The goal of JIT is to enhance a
company's return on investment by reducing non-essential prices.
P4.3 Make appropriate application to the Ashley Furniture Inc.
Ashley Furniture is one of the biggest brand in the furniture industry, it was found in 1945 in
Chicago, Illinois. On January 23rd 2018, Ashley HomeStore reaches 800 HomeStores (Ashley Furniture
Corporation , 2018).
They set the goal for 2019 is reaching 900 HomeStores in the world. Their vision is wanting to
become the best furniture and a long history. They establishing, linking goal together with actions towards
the goal of every employee in the company with the core values are: Honesty & integrity; Passion, Drive,
Discipline; Continuous Improvement; Dirty Fingernail; Growth Focused. It is a process in which
managers and employees identify the common goal, the expectations of management for employees and
the use of measures to direct the organization's performance and evaluate the results of the individual.
This goal is carried out by Ashley with the aim is reaching 900 HomeStores in the world. It is one
of the most importance things to show that they have a good and large retail system and develop their
selling, so they can enhance their income. The way they can reach the goal is doing some campaign about
marketing their products and services or imagine to consumers. They should choose some potential
markets where the demand of people about is large such as Europe, North America, especially Asia. Asia
is the most potential market that Ashley should consider to extend its retailer store network. The goal is
not only specific, it also measurable. The goal is reaching 900 HomeStores, it is completely quantified. In
2017, Ashley Furniture reached 700 HomeStores. According to Ashley Furniture (2018), they have over
800 HomeStores worldwide. There are over 23000 employees, the revenue is 4.7 billion USD and Ashley
is the America's Largest Private Companies, according to Forbes (2018). This is the solid foundation to
achieve the goal. However, it is not easy for Ashley to reach their goal. There are many competitors also
are the key players in the furniture industry such as IKEA, French Heritage, … They have many
advantages that Ashley does not have. Moreover, the customer segmentation is difference in difference
market. It has to suitable with people’s style, culture and income and also the weather in those places.
Ashley have to handle it well with a close control of the market and know how to hold their advantages,

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they can achieve the goal. The time bound to reach the goal is a year, they should management the time
well and logical to attain satisfactory result.
Ashley is using the lean producing process which help them avoid the waste of time and money, so
they may use the JIT inventory. In the other hand, their chain has over 800 locations worldwide, it very
hard to fulfill the requirement of the massive retailer system when they use the JIT inventory.

P5. Explain the importance and value of operations management in

achieving business objectives.
P5.1 Discuss the following operational functions of a business.
a. Process design
Process design is the activity of determining the progress, equipment wants, and implementation
needs for a specific process. process design usually uses a variety of tools involving flowcharting, process
simulation software, and scale models. The process design has six functions: Define system level design
problem, Develop the system functional architecture, the system physical architecture, the system
operation architecture, the interface architecture, and define the qualification system for the system
(Cowan, 2018).
b. Scheduling
Scheduling is the process of transcription, dominant and optimizing work and workloads during a
production process or producing process. scheduling is used to allocate plant and machinery resources,
arrange human resources, arrange production processes and buy materials (PLANETTOGETHER, 2018).
The advantages of production scheduling include: Process change-over reduction, Inventory reduction,
leveling, reduced scheduling effort, enhanced production potency, labor load leveling, accurate delivery
date quotes, real-time data. Production scheduling tools greatly outperform older manual scheduling
strategies. These offer the production scheduler with powerful graphical interfaces which can be used to
visually optimize real-time workloads in numerous stages of production, and pattern recognition permits
the software to mechanically produce scheduling opportunities which could not be apparent without this
view into the information.
c. Logistics and inventory management
Logistics and inventory is the method of planning, implementing and dominant the economical,
cost-efficient flow and storage of raw materials, in-process inventory, finished product and connected data
from purpose of origin to point of consumption for the aim of conforming to client needs (American

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Agricultural Economics Association, 2005). Some benefits of logistics and inventory management are
increasing sale, increased information transparency, shorter lead times, lower costs, improved delivery
performance, increased employee efficiency, accurate planning, decreased stock-outs, increased customer
loyalty, increased inventory turnover.
d. Distribution management system
Distribution management system is the management of the economical transfer of products from
the place of manufacture to the purpose of sale or consumption (Igi-Global, 2018). Distribution
management encompasses such activities as storage, materials handling, packaging, stock management,
order processing, and transportation. Distribution is the Place factor of the marketing mix (4Ps):
Distribution channel, distribution area, point of sale, warehouses, means of transport.
e. Capacity management
Capacity management is the management of the bounds of an organization's resources, like its
labor force, producing and workplace area, technology and instrumentality, raw materials, and inventory
(Levy, 2018). Capacity management also deals with the capacity of an organization's processes. so as to
manage capacity, an organization should consider the proportion of capacity that is truly being used over a
time period. In today’s business world, evaluating and managing capacities is becoming considerably
more difficult. Therefore, managers have to do an equalization act to reduce prices and effectively utilize
obtainable capacities.
P5.2 3 functions to give specific application to Ashley Furniture Inc.
The process design of Ashley reacts quickly to client tastes, and have conquered the flexibility to
create style and choice affordable. talented and impressive, they travel the world to achieve an
understanding of the newest trends and find out emerging materials, constructions and technologies.
Mastering the art of collaboration, they work closely with multiple departments to make sure merchandise
is created with efficiency. This approach contributes to Ashley furniture Industries simple producing, price
management, and speed to market. Ashley furniture Industries a clear and comprehensive approach to a
standard of their merchandise adds to their reputation as a “World-Class furniture Manufacturer”. At
Ashley furniture Industries, they appeal to the first impression of their customers and aim for the very best
out-of-box quality. nine state-of- the- art worldwide testing labs fuel the development of the merchandise,
packages, and processes that make up the world’s best furniture values (Ashley Furniture Industry Inc ,
2018).

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 The raw materials are regionally located to avoid wasting the customer time and money. They have
US producing facilities in Wisconsin, Mississippi, North Carolina and Pennsylvania, as well as
international producing locations abroad. Using progressive instrumentality which is often designed and
designed in-house, proprietary and proprietary assembly ways, efficient systems, and strict quality control
processes, these facilities manufacture over 7000 product SKUs in over 22 product classes annually.
inside the US facilities, there is an output of over 50,000 units per day or over 250,000 units per week.
With worldwide physical testing labs in Arcadia, WI; Ecru, MS: Leesport, PA; Shanghai, China and
Vietnam it allows them to continually analyze the standard of their raw materials, construction ways, and
finished products. Finished product undergo intensive critical evaluations for durability, appearance, feel
by hands, and overall performance. All of their state of the art labs keep in constant communication as
tests and merchandise standards are developed and executed both within the lab and on the factory floor.
The distribution management system of Ashley is huge. Ashley Furniture Industries pays close
attention to their provide chain – the network between them and the suppliers concerned in manufacturing
and distributing quality furniture to customers. Their international supply chain blends and optimizes both
domestic and foreign production efforts to the most benefit of their customers. The Ashley furniture
Industries supply chain management system directs every variable that goes into creating and moving
product. Planned inventory levels ensure constant, timely provide of product. Their system is one of the
most refined, efficient, and dynamic logistics systems in the world. With it, they can still fulfill their
mission to cut back costs and supply quality products on time and at an exceptional worth.
P5.3 How the good management of these operational functions would help the
company to obtain its business’ objectives.
These 3 operational functions are mentioned in P5.2 are very important to help Ashley attain their
goal. They set the goal with S.M.A.R.T criteria is reaching the 900 HomeStores in 2019. The process
design helps the corporate in making a process that is knowing the objectives and supports the corporate
by having a transparent look. It designs a particular process for Ashley company to enhance their retail
system with each little step like developing the abilities and information of the sales staff and detail plan
on a special time of year when the opportunities to enhance the results of the company are various.
scheduling could help Ashley furniture by providing an appropriate work schedule for staff and every
individual. Having a good schedule that is designed for each employee is comfortable so the corporate
could run effective and supply specific time-zone within the different time during a year like a schedule in
vacation are going to be longer than usual because of the shopping habit of individuals, which offer a

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chance to boost the income. With the capacity management, Ashley furniture could manage the resource
of the corporate better just like the labor in order that they could use resources in a good approach and also
manage the sales needed has reached or not. logistics and inventory management with sensible
management can support the corporate to keep and deliver the merchandise within the best method, which
can satisfy the customers or buyers and make a satisfaction so that they would love to visit Ashley
Homestore to order product once more. Transformation raw materials into finished product or service in a
good method could give quality merchandise and service that is the one to urge the attention of the
customers and additionally the one the consumers only mention after buying. If the standard satisfies their
demand, they will produce a good impression within the customer mind and make them need to shop for
more or invite somebody else. With management and distribution system, Ashley furniture might
management their machines within the effective way to use all the potential of the machine sources that
the corporation has paid lots of investment in order that the work of their staff could be a lot of easier and
effective to make more deals to extend the income.

P6. Assess the factors within the business environment that impact
upon operational management and decision-making by leaders and
managers.
P6.1 Business environment (Industry analysis)
a. Porter’s Five Force Model
Porter's Five Forces is a model of business competition. It is a tool used to analyze the
competitive surroundings in terms of five key forces that affect a company's gain and influence its strategy
(Porter, 2008). There are five elements in the Porter’s Five Forces model:
The potential competitions are some barriers that inhibit the companies in that moments. They
include barriers to entry which prevent the entry of businesses or organizations into the industry and
barriers to exit which prevent them to exit from an industry, frequently it relates to the charge of exit the
industry. However, there are some industries are “natural monopolies” in that the production process is
such that competition would be wasteful. The potential competitions make the firms aware of the patents,
rights, policy, switching cost and many things to make a decision on entry or exit from an industry.
The current competition may affect the company’s strategy. The strength of competitive is the
major factor of the competitiveness of the manufacturing. For example, the market which has a perfect

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competition allows the firms entry or exit easily from this market and the monopoly market brings to the
businesses more power like setting any price they want.
A substitute product is an alternative to deal with the customers’ needs and demands. If there are
many substitutes in the market, the company will have to consider the strategy like pricing or making a
good product or service to make sure it has the customers’ attraction.
The power of suppliers is defined as the market of inputs. Any supply chain break can disrupt a
business. Companies without existing back-up suppliers may find themselves subject to increased costs
because of price extracting that may happen during a natural threat’s result.
The power of customers is also defined as the market of outputs. The customers’ behavior is one
of the most thing that companies want to follow and base on this to bring the products and services to the
customers. Moreover, the buyer price sensitive influences on the pricing strategy of a firm.
b. Concisely to the furniture industry
In the furniture industry, the competition is kind of high, there are several big firms that offer the
same merchandise. For examples, IKEA, French Heritage, Aaron, Gensler, as well as some local brands
like Hoa Phat. There are no substitute products to furniture, thus firms don’t need to worried about the
substitute products. Power of suppliers within the industry is relatively low, there is a large variety of
suppliers of raw resources, it additionally ought to be mentioned that not only wood is used for
manufacture, but alternative resources like plastic or metal. The threat of new entrants is possible, it is not
difficult to star own furniture production even for small enterprise or non-public handmade entrepreneurs,
there are no substitute products and power of suppliers is not high. However, to become a giant
transnational brand like Ashley or IKEA will quite hard and prices lots of money. It takes a lot of time and
money to determine production and retail spots everywhere in the planet. Power of consumers is high
because customers have many selections in the industry.
c. The key forces affecting the operational management and decision making.
In the furniture industry, the current completion and the power of buyer are the key forces affecting
the operational management and decision making of Ashley. In the industry, there are many huge
companies which are the competitors of Ashley Furniture such as IKEA, Gensler. They all offer good
products, models and segments are very diverse, reasonable price, the service is more and more develop.
The power of buyer is high in the industry because the consumers have many choices such as brand, style,
price or their taste. These two factors have affected to the Ashley’s operational management and decision
making. The company have to run some campaigns or open offer some sale events to pay the consumers’

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attention. They also more consider to the customers’ behavior and offer some good services to make
customers satisfy.
P6.2 Pressures from stakeholders
a. The concept of stakeholder
A stakeholder is a member of the groups without whose support the company would stop to exist
(Freeman & Reed, 1983). Some examples of key stakeholders are creditors, directors, employees,
government, owners, suppliers, unions, and the community from that the business attracts its resources.
Not all stakeholders are equal. A company's customers are entitled to honest commerce practices.
However, they are not entitled to the identical thought as the company's staff. Internal stakeholders are
owners, managers, and employees. External stakeholders are the consumers and the suppliers. The
community within which the organization does business also is a stakeholder. Not all stakeholders are
equal, and completely different stakeholders can have varying issues. These stakeholders can have a direct
or indirect stake within the organization and in political (Anderson, 2017).
b. A current issue that the whole furniture industry in general is facing.
Due to the large number of manufacturers and suppliers, with a great variety of models, types and
origins of furniture, management of this market is very difficult with the management agencies. This leads
to the fact that counterfeit goods, counterfeit goods, poor quality goods still have land on the market,
affecting the interests of consumers and society in general. The reason for the false furniture, imitation
goods and floating goods are still bluntly sold, partly due to unethical business units, take advantage of the
gap of the market for profiteering. On the one hand, management is not good enough. To deal with this
problem, Ashley just only import the raw materials are regionally located with the US producing facilities.
They also have a quality control process to make sure that all of their final products are at the highest
quality.
c. Discuss the pressures relating to the issue from different stakeholder groups on
the management and leadership roles of the company
Different stakeholders have different influence. Owners have a serious say in the method the
corporate functions. They generally tend to extract the most efficiency and create the most profit from
their investments in the company. Customers are key stakeholders in any organization. The way they are
catered to and their level of satisfaction determines how the corporate runs.
Primary stakeholders are the most important individuals to the business, who have the strongest
voice in the approach the corporate runs. In small businesses, primary stakeholders are owners,

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employees, and customers. These primary stakeholders decide the corporate policies and plans. In large
businesses, primary stakeholders can vote the directors out if they feel the directors don't seem to be
performing properly. Less influential stakeholders are mentioned as secondary stakeholders.
Various stakeholders have numerous interests in the company. Owners need to maximize their
profits and have an interest in how well their business is functioning. Managers and employees are
interested in their salaries and need to keep their jobs at all prices. Lenders want businesses to repay their
loans on time and fully. Customers need the corporate to provide high-quality products for affordable
rates. They also search for sensible customer service before and after the sale. The community desires the
corporate to be environmentally friendly.
Firms can register better performance when it manages its relationships with various stakeholders
well and meets their expectations (Freeman, 1984). It is widely accepted that companies face pressures
from numerous stakeholders, both internal and external, on various problems including environmental
performance (Henriques & Sadorsky, 1999). Stakeholder pressures could encourage firms to take a lot of
consideration of environmental problems and may encourage them to include environmental practices into
their management strategies. Since firms must reply to pressures emanating from stakeholders as well as
to meet their interests and desires, these pressures have considerably contributed to an enhanced
environmental performance of firms.
P6.3 How leaders and managers can meet the key stakeholders’ expectations
and reduce the pressures by becoming a corporate entrepreneur and encouraging
intrapreneurship.
Corporate entrepreneurship is particularly crucial for big corporations, enabling these
organizations - that are historically indisposed to risk-taking - to innovate, driving leaders and groups
toward a raised level of company enterprising. Additionally, to the plain advantages obtained through
innovation, this approach also provides the structure advantage of setting the stage for leadership
continuity. In an easier view, company entrepreneurship may also be considered a method of
organizational renewal. For additionally to its concentrate on innovation, there also exists an equal drive
toward venturing. These two add unison because the company undertakes innovations across the whole
organizational spectrum, from product and method to technology and administration. Moreover, venturing
could be a primary element within the method, pushing larger corporations to boost their overall
competitiveness within the marketplace by taking larger risks.

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 Intrapreneurship involves making or discovering new concepts or opportunities for the aim of
making value, where this activity involves making a replacement and self-financing organization inside or
below the auspices of an existing company. An entrepreneur is a one who practices intrapreneurship. a
company manager who starts a replacement initiative for his or her company that entails putting in place a
replacement distinct business unit associate degreed board of administrators may be considered an
entrepreneur. In contrast, a company manager who starts a brand-new initiative using pre-existing
corporate structures is not an entrepreneur. neither is a leader of a unit inside a company, whose
innovations are managed by the organization. Were this leader to form a brand new complete
organization, that performs its own functions and sells its own product although with strong continued
links to the parent firm, organization which would count as intrapreneurship. There are 2 ways that solve
the scandal by encouraging intrapreneurship and changing into corporate entrepreneurship. First,
encouraging intrapreneurship is one of the solutions to beat the company’s issue. By encouraging
intrapreneurship to all or any over the firm’s staff and managers, it may reach to the unlimited resource
regarding the plan and with its strength regarding finance and human resources, it is ability to run the
ideals quicker than others and ready to face with failures from that project. The second solution of this
issues is becoming corporate entrepreneurship. By introducing as a brand-new entrant, they're going to
have the supports from the shoppers once their name had not been affected, conjointly they'd have some
blessings like being underestimate by their competitors. changing into a company entrepreneurship, they
need to require risks by being associate degree beginner in furnishings however exploitation vast supports
from the recent company in an efficient approach, the issues are going to be solve. If they start-up success,
they're going to have chance to require back their recent position and overcome the scandal.

Conclusion
This assignment has explained the key approaches to operations management and the role that
leaders and managers play, the importance and value of operations management in achieving business
objectives, and Assess the factors that impact upon operational management and decision-making by
leaders and managers.

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