OPERATIONAL BUSINESS MANAGEMENT I

Learn the business of horticulture with this module from the prestigious and world-renowned Royal Horticultural Society.

COURSE AIM

Develop an ability to formulate and evaluate strategy as well as to ensure effective business performance in today's fast changing social, political and economic environment, for horticultural enterprises within one sector of the horticulture industry.

COURSE CONTENT

There are 8 lessons in this module as follows:

1. The Economic Environment
2. External Influences on Horticultural Enterprise
3. Information Management for Horticulture
4. Strategic Planning in Horticulture
5. Implementing Strategies
6. PBL Project:Developing a Business Plan
7. Business Control Systems for Horticulture
8. Evaluating Horticultural Marketing
9. Marketing Strategies for Horticulture

Each lesson should require around 10 hours of work, except for Lesson 6, which will require around 20 hours.

AIMS

• Explain the economic environment in which horticultural business operates.
• Appraise the impact of external influences.
• Establish the type of information required for operations in both commercial businesses and service organisations.
• Examine the process and analyse approaches to strategic planning.
• Examine the process and analyse approaches to strategy formation and implementation.
• Prepare a business plan.
• Assess the importance of business control systems utilising IT integration into financial management; prepare, read and interpret annual statements, appreciate the importance of budgetary control.
• Identify the benefits involved when preparing marketing plans; analyse organisational strengths, weaknesses, opportunities and threats.
• Formulate customer-orientated and realisable strategies for selected markets.

Lesson Structure

There are 9 lessons in this course:

1. The Economic Environment
   • The world of economics
   • Scarcity
   • Opportunity costs
   • Goods
   • Definitions
   • Economic systems
   • Economic ownership
   • Performance criteria for an economy
   • Other economic performance indicators
   • Basic economic principles
   • Law of demand
   • Law of Substitution
   • Law of diminishing return
   • Law of diminished marginal utility
   • Competition
   • Sustainability
   • Total Quality Management
   • Strategic Planning
   • Creating a strategic plan
   • European economic union
   • European Central bank
   • Asia Pacific Economic Community
2. External Influences on Horticultural Enterprise
   • Monopoly
   • Monopolistic Competition
   • Oligopoly
   • Perfect competition
   • International markets and tradeable commodities
   • Globalisation
   • Supply and demand
   • Market forces
   • Demand
   • Supply
   • Elasticity
   • Economics of scale
   • Cost structures
   • Liquidity
3. Information Management for Horticulture
   • Scope and nature of office work
   • Functions of an office
   • Common jobs in an office: reception, clerical, secretarial, information processing
   • Departments within an organisation
   • Office processes
   • Data knowledge, strage and management
   • Filing systems
   • Classifying information
   • Hard copy
   • Filing procedure
   • Active and inactive records
   • Computer databases
   • Designing a filing system
   • Data protection
   • Financial records
   • Books needed in business
   • Different ways to approach bookkeeping
   • Steps in the bookkeeping process
   • Developing a record keeping and accounting system
   • Flow of information
   • Financial reports
   • Ledger
   • Journal
   • Source documents
   • Cash transactions
   • Credit transactions
   • Returns and allowances
   • Other business documents
   • Use of business documents
   • The cash book
   • Credit sales and credit purchases journal
   • The general journal
   • The ledger
   • A trial balance
   • Bank reconciliation
   • Petty cash
4. Strategic Planning in Horticulture
   • Strategic planning
   • Documenting the strategy
   • Operational planning
   • Documenting an operational plan
   • Key components of a business plan
   • SWOT analysis
   • A planning procedure
   • Decisions
   • What to plan for
   • Finance
   • Structure for a Financial plan
   • Developing a budget
   • Structure for a marketing plan
   • Plan drawing
5. Implementing Strategies
   • Implementing strategy
   • Benchmarking
   • Reviewing strategy and strategy management
   • Environmental audits
   • Key elements of EIA
   • Steps in an environmental assessment process
   • Study design
   • Baseline studies
   • Predicting impacts
   • Mitigation measures
   • Flora and fauna assessment
   • Open space management plan
   • Rehabilitation plan
6. Developing a Business Plan
   • Business planning
   • Case study: nursery development plan
   • Sensitivity analysis
   • PBL project to formulate criteria required for the successful implementation of a business proposal to develop a business plan.
7. Business Control Systems for Horticulture
   • Financial statements
   • The balance sheet
   • Classification in the balance sheet
   • Working capital
   • Profit and loss statement
   • Link between profit and balance sheet
   • Depreciation of assets
   • Analysis and interpretation of accounting reports
   • Analytical ratios
   • Ratio yardsticks
   • Profitability ratios
   • Operating efficiency ratios
   • Efficiency ratios and profitability
   • Liquidity ratios
   • Liquidity analysis and cash budgeting
   • Financial stability ratios
   • Gearing rate of return on investment
   • Limitations to ratio analysis
   • Risk
   • Risk analysis
   • Contingency planning
   • Business systems
   • Quality systems
   • Innovation management
   • PERT (Program evaluation and review)
   • CPA (Critical path analysis)
   • GNATT ChartsFastest and slowest completion times
   • Business expansion and sources of finance
   • Record keeping
8. Evaluating Horticultural Marketing
   • Introduction
   • Market research
   • The marketing mix
   • Marketing planning
   • Services marketing
   • Customer service
   • Buying, selling and decision making
   • Different heuristics
   • Decision making process
   • Customer satisfaction
   • Goodwill
9. Marketing Strategies for Horticulture
   • Target markets and market segmentation
   • Targeting strategies
   • Defining your target market
   • Determining market segmentation
   • Projecting the future
   • Positioning
   • Case study: The market for landscape contractors
   • The business portfolio

Once an appropriate business strategy has been formulated an implementation plan is developed to include performance targets and measures that reflect the strategy’s objectives. This sounds reasonably straight forward but in reality this is where many companies fall down; most businesses develop strategy plans but many never successfully implement them.
This may be due to:

• Lack of staff motivation.
• Lack of staff cohesion (ie. working together towards the same aim).
• Lack of direction from management.
• Resources don’t meet projected outputs.

Successful strategy implementation comes from within the operations of a company through:

• Building a company culture and focussing on continual improvement .
• Organisational capabilities – providing a framework for detailed day to day planning; assessing performance; ensure coherence to the strategy plan through decisions and actions taken over time. Encouraging proficiency and efficiency. Implementing policies supportive of the strategy plan.
• Leadership, supervision and motivation – implementation must involve all levels of management. Team and individual roles, responsibilities and targets within a company should be clearly identified and defined; internal support systems should be in place.
• Budgets – managers evaluate competing budget requirements within the company and direct resources to areas that support the strategy and produce results.
• Timing - producing the best results in the least possible amount of time.
• Rewards aligned to results (usually the amount a person is paid, but also job satisfaction).

Benchmarking
Benchmarking is a valuable tool that can be used to improve your business processes and performance by identifying, understanding and comparing best practice used by other organisations world-wide, inside and outside of your industry. The process is only useful if the companies you are benchmarking are known for their high performance; there is no point for example in benchmarking a low performing competitor as then your standards will reflect theirs.
When benchmarking, identify companies whose business processes are efficient, compatible and adaptable to your own business.
Benchmarking implementation decisions should be regularly evaluated and reviewed to ensure that corporate, operational and individual targets are reached.
Benchmarking research information is easily obtained through: email, internet, telephone, the European Benchmarking Code of Conduct etc. 

• The market – market survival, market leadership, market positioning, expansion into broader markets. 
• Economic climate.
• Political climate.
• Technological change – better and more efficient ways of doing things may develop.
• Societal shift (demographics, affluence, employment etc.).
• Environmental considerations.
• The internal aspects of the business – stability, profitability, efficiency and resources match the intent and capability of the business; effect of mergers and acquisitions. New managers come with new ideas.

• Evaluate performance constantly.
• Make decisions that reflect current performance.
• Make adjustments as needed.
• These adjustments may include:

Changing the businesses long term direction.

• Redefining the business.
• Changing performance objectives (higher or lower).
• Adjusting the strategy.
• Improving strategy implementation.