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Possible Answers
Production Manager
- The production manager adopts a mix of democratic leadership (the company has a meeting of Section Heads and this is where the key decisions are made) and laissez-faire (as he allows the employee to carry out their activities within broad limits).
- Cameron Balloons adopt job production for each balloon, as each is an original, and batch production for the medical products.
- Modern quality control methods occur throughout the process in order to prevent problems building up. If left to the end of the process, a large amount of work may have to be undone in order to rectify a problem.
- It is difficult to measure performance on an individual basis at Cameron Balloons due to the team nature of the work however possible methods might include:
- bonuses for work completed on time
- number of panels produced in a time period
- profit-related pay
- Cameron Balloon employees are motivated by team-working. They are set clear objectives and are allowed a certain amount of autonomy in decision-making; they are empowered. In addition to the above, workers carry out a wide variety of tasks and thus benefit from job enrichment. This is a company that would follow Herzberg's principles.
Marketing Manager
- Cameron Balloons operate in niche markets.
- Possible marketing objectives may include:
- Maximising market share -this is a relatively small market where Cameron Balloons are the market leader.
- Protecting market share -for the same reason as above.
- To develop a range of products - all balloons are not the same! Just like cars, balloons come in a variety of specifications.
- Likewise the company is "branching out" into medical supplies this using its expertise in other areas.
- Cameron Balloons do both primary and secondary research. Primary research includes questionnaires to customers old and new and also to potential customers. Secondary research might include statistics produced by the Balloon Association or by specialist magazines.
- The key areas would be:
- The product and associated service - Cameron Balloons prides itself on the quality of its products and also the bespoke service it provides. The company aims to meet the customers requirements exactly, every time!
- Promotion -Cameron Balloons is involved in many projects each year that generate publicity for the company, they aim to make the most of this attention. Recent projects include the Breitling Orbitor balloon that was the first to fly around the world without stopping. In addition the company is highly involved in organising and running the Bristol Balloon Festival.
- Demand for balloons would tend to be price inelastic. If an individual wishes to purchase a balloon they will be willing to make a substantial investment and thus changes in the price are unlikely to have a large effect on demand. Also a balloon is a large one-off purchase and thus a change in price would have less effect.
Accounting and Purchasing Manager
- Working capital is the amount of money needed to pay for the day-to-day trading of a business. It is calculated by current assets minus current liabilities.
- Cash flow control is crucial to a firm like Cameron Balloons as there is very little flexibility regarding working capital. A small firm will not have large funds as any cash it has will be committed to generating profit. If cash flow is not carefully controlled firms such as Cameron Balloons may find themselves short at any one time and thus unable to pay their bills. Such a situation can cause a chain reaction whereby suppliers and customers pull out of that business as they no longer trust the company to honour its debts.
- Cameron Balloons use suppliers from Europe and will therefore have to buy Euros with pound sterling. A fall in the pound's value would be bad for the company, as foreign suppliers' prices become more expensive.
Example: £1:1 Euro
- A supplier's material is priced at 20 Euro per square metre
- Cost to Cameron Balloons = 20/1 = £20 per square metre
- The value of sterling falls - we can buy fewer Euro for £1
£1:0.5 Euro
- New cost to Cameron Balloon = 20/0.5 = £40
- However a fall in the value of pound sterling would be beneficial to sales
£1:1 Euro
- The company quotes its balloon price as 10,000 Euros
- Value in pounds = 10,000/1 = £10,000
- The value of sterling falls - we receive more Euro for our pound sterling
£1:0.5 Euro
- New value in pounds = 10,000/0.5 = £20,000
- The balance sheet is useful because:
- it shows the value of the company -may be helpful when getting new sources of finance.
- it shows working capital and can therefore persuade new suppliers to lend credit.
- it allows the owner to see how well the company is performing.
- The profit and loss sheet is useful because:
- costs of the company can be easily analysed.
- profitable areas become more obvious.
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