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IT Passport ExamPreparation BookITPassportiAbout this Book...................................................................1Overview of Examination.................................................... 4Scope ofQuestions..............................................................8Strategy----------------------------------------------------------------------12Chapter 1Corporate and legal affairs............................141-1Corporate activities ----------------------------------------151-1-1Management and organization............................................. 151-1-2OR (OperationsResearch) and IE (Industrial Engineering) .... 211-1-3Accountingand nancial affairs ..........................................371-2Legal affairs---------------------------------------------------431-2-1Intellectual property rights.................................................... 431-2-2Laws onsecurity....................................................................481-2-3Laws on labor and transaction............................................. 491-2-4Otherlegislation, guidelines, and engineer ethics .............521-2-5Standardization......................................................................561-3Chapter quiz---------------------------------------------------60CONTENTSiiChapter 2Business strategy.......................................... 642-1Business strategymanagement --------------------- 652-1-1Business strategytechniques ..............................................652-1-2Marketing................................................................................702-1-3Business strategy and goal/evaluation............................... 722-1-4Business management systems.......................................... 742-2Technologicalstrategy management ------------- 752-2-1Technological strategyplanning and technology development planning...........................................................752-3Businessindustry---------------------------------------------772-3-1Businesssystem....................................................................772-3-2Engineering system...............................................................822-3-3E-business..............................................................................832-3-4Consumer appliances and industrial devices..................... 852-4Chapter quiz--------------------------------------------------- 86Chapter3System strategy .............................................903-1System strategy ---------------------------------------------913-1-1Concept of information systems strategy........................... 913-1-2Concept of business process............................................... 923-1-3Solutionbusiness..................................................................993-2System planning -------------------------------------------1023-2-1Computerization planning...................................................1023-2-2Requirements denition......................................................1043-2-3Procurement planning and implementation...................... 1053-3Chapter quiz-------------------------------------------------109ITPassportiiiManagement--------------------------------------------------------------112Chapter4Development technology ............................. 1144-1Systemdevelopment technology ----------------- 1154-1-1Process of systemdevelopment ........................................1154-1-2Software estimation.............................................................1254-2Software development management techniques----------------------------------------------------1264-2-1Software development process and methods ..................1264-3Chapter quiz------------------------------------------------- 129Chapter5Project management ...................................1305-1Project management ------------------------------------1315-1-1Project management............................................................1315-1-2Project scope management................................................ 1335-2Chapter quiz------------------------------------------------- 138Chapter6Service management ...................................1406-1Service management ------------------------------------1416-1-1Service management...........................................................1416-1-2Service support....................................................................1436-1-3Service delivery....................................................................1446-1-4Facility management...........................................................1466-2System audit------------------------------------------------- 1476-2-1Systemaudit.........................................................................1476-2-2Internal control.....................................................................1506-3Chapter quiz-------------------------------------------------152ITPassportivTechnology----------------------------------------------------------------154Chapter 7Basic theory................................................. 1567-1Basictheory -------------------------------------------------1577-1-1Discrete mathematics..........................................................1577-1-2Applied mathematics...........................................................1627-1-3Theory of information..........................................................1667-2Algorithms and programming -----------------------1717-2-1Data structures.....................................................................1717-2-2Algorithms............................................................................1747-2-3Programming and programming languages .....................1797-2-4Markup languages...............................................................1807-3Chapter quiz------------------------------------------------- 183Chapter8Computer system .........................................1868-1Computer component -----------------------------------1878-1-1Processor.............................................................................1878-1-2Storage device.....................................................................1908-1-3Input/Output devices...........................................................1998-2System component ---------------------------------------2048-2-1System conguration..........................................................2048-2-2System evaluation indexes................................................. 2088-3Software------------------------------------------------------- 2128-3-1OS(Operating System)........................................................2128-3-2File management..................................................................2148-3-3Development tools...............................................................2188-3-4OSS (Open Source Software)............................................. 2218-4Hardware------------------------------------------------------2238-4-1Hardware...............................................................................2238-5Chapter quiz------------------------------------------------- 229vChapter9Technology element ....................................2349-1Human interface -------------------------------------------2359-1-1Human interface technology............................................... 2359-1-2Interfacedesign...................................................................2369-2Multimedia----------------------------------------------------2409-2-1Multimedia technology........................................................2409-2-2Multimedia application........................................................2439-3Database-------------------------------------------------------2479-3-1Database architecture.........................................................2479-3-2Database design..................................................................2509-3-3Data manipulation................................................................2539-3-4Transaction processing.......................................................2559-4Network--------------------------------------------------------2589-4-1Network architecture...........................................................2589-4-2Communications protocols................................................ 2679-4-3Networkapplication.............................................................2729-5Security--------------------------------------------------------2799-5-1Information assets and information security.................... 2799-5-2Information security management..................................... 2849-5-3Information securitymeasures/information security implementation technology................................................ 2889-6Chapter quiz------------------------------------------------- 301Practice exam..................................................................308Practice exam 1.................................................................................309Practice exam 2.................................................................................340Practice exam 3.................................................................................370Index................................................................................4001About this Book1Structure of this BookThis book is comprised ofthe following sections.Overview of ExaminationScope ofQuestionsThis section describes the basic approach for theexamination questions and the scope of the ex-aminationquestions.Chapter 1Corporate and legalaffairsChapter1explainsthebasicknowledgeofcorporateactivitiesandbusinessmanagementthatbusiness workers should possess, as well as legal compliance andcorporate ethics.Chapter 2Business strategyChapter 2 explainstypical systems in each eld including typical information analysistechniques and marketing techniques, business management systems,and technological strategies.Chapter 3System strategyChapter 3details business processes, methods to improve business operations,the ow of infor-mation system construction, the composition of arequirements denition aimed at computeriza-tion, and other itemsbased on information systems strategy.Chapter 4DevelopmenttechnologyChapter 4 explains system development processes and testtechniques, as well as software devel-opment processes anddevelopment methods.Chapter 5Project managementChapter 5 explainsthe processes of project management and techniques of project scopemanage-ment.Chapter 6Service managementChapter 6 explains the basicroles and components of IT service management including theman-agementofinformationsystemoperations,servicesupport,theconceptofsystemenvironmentdevelopment, and the basic principles of system audits.Chapter7Basic theoryChapter 7 explains the fundamental concepts ofradixes, sets, probabilities, and statistics, as well as thedigitization of information and algorithms.Chapter 8ComputersystemChapter 8 examines computer components, system components,hardware, and software, and ex-plains each type of component andtheir characteristics.Chapter 9TechnologyelementChapter9examinesthecharacteristicsofhumaninterfacesandmultimediatechnology,basicknowledge about database design and networks, as well as securitymeasures and other aspects.Practice examThe practice exam includespractice questions for the IT Passport Examination.Answers andExplanations BookletThe booklet contains answers and explanationsfor the chapter quiz (Chapters 1 to 9) and practice examquestions.2Notations Used in this BookThe notations used in thisbook serve the following purposes.Reference A short summary ofuseful information or terminology, or a citation of a subchap-terfor an explanation.*Supplementary notes or content to pay attentiontoThe text in this book may contain laws, standards and accountingrules that only apply in Japan.23Answers and ExplanationsBookletThebookletattheendofthisbookcontainsanswersandexplanationsforthechapterquizandpractice exam questions.19Q1. Section 1-2LegalaffairsAnswerdExplanationIf used within the scope covered by thelicense agreement, then it does not violate the Copy-right Act.Q2.Section 2-1Business strategy managementAnswerdExplanationSWOTanalysisisananalysistechniqueusedforplanningcorporatestrategies.TheSstands for strengths, and W for weaknesses.Q3. Section 1-1CorporateactivitiesAnsweraExplanationCSR (Corporate Social Responsibility)refers to the responsibilities that a corporations shouldfullltosociety.ManycorporationspublishtheirCSRapproachthroughtheirWebpageorpublish a CSR report in order to earn the condence ofstakeholders.Q4. Section 2-1Business strategymanagementAnsweraExplanationThe star of PPM is a product thatrequires investment with growth, but offers a high market growthrate and market share.b): Describes a dog.c): Describes a questionmark.d): Describes a cash cow.Q5. Section 1-2LegalaffairsAnswerbExplanationa):Under a dispatch contract, the clientcompany has the right to issue instructions to the dis-patchemployee, but matters concerning the dispatch contract such as paidleave and over-time must be cleared rst with the dispatchingcompany.c):Even if erroneous entry of data into a productmanagement system leads to the production of defective goods, theright to issue instructions lies with the client company.Therefore, the client company cannot blame the responsibility forthe manufactured goods on the dis-patching company.d): Instructingan employee to work overtime as if the person were an employee ofthe client company is a matter that concerns the dispatch contract,so the client company must obtain the approval of the dispatchingcompany.Practice exam 1 answers1 SectionSection Sections that areapplicable to this book.13Overview of Examination51TypicalExamineesIndividualswhohavebasicknowledgeofinformationtechnologythatallbusinessworkersshould commonly possess, and who perform information technologyrelated tasks, or are trying to utilize information technology inhis/her tasks in charge.2Tasks andRolesIndividualswhohavebasicknowledgeofinformationtechnologythatallbusinessworkersshouldcommonlypossess,andwhoperforminformationtechnologyrelatedtasks,oraretryingtoutilizeinformationtechnologyinhis/hertasksincharge.Chapter5explainstheprocessesofproject management and techniques of project scopemanagement.Understand information devices and systems to use, andutilize them.Understand the tasks in charge, identies problems ofthose tasks, and act to provide required solutions.Performacquisition and utilization of information safely.Support taskanalysis and systemization activities under the guidance ofsuperiors.3Expected Technology LevelThe following basic knowledgeshall be required as a working person in order to determineinfor-mation devices and systems, and to perform tasks in charge aswell as facilitate systemization.Knowledge of computer systems andnetworks to determine the information devices and sys-tems to use,and knowledge of how to utilize ofce tools.Knowledge of corporateactivity and relatedtasksin order to understand the tasksin charge.Also, in order to identify issues of the tasks in charge andprovide required solutions, system-atic thinking and logicalthinking as well as knowledge of problem analysis and problemsolv-ing methodologies shall be required.Ability to act inaccordance with relevant laws and regulations as well as variousinformation security provisions in order to utilize informationsafely.Knowledge of development and operations of informationsystems in order to support analysis and systemization of tasks.Overview of Exam64Supplementary Explanation of Expected TechnologyLevelThe following basic knowledge shall be required as a workingperson in order to determine infor-mation devices and systems, andto perform his/her tasks in charge as well as facilitatesystemiza-tion.Understand and utilize the information equipment andsystems to beused:Capabilitytounderstandtheperformance,characteristics,andfunctionsoftheinformationdevices used in the workplace and utilize themappropriately.Capability to understand the signicance of theoperations and functions of OS settings and application softwaresuch as ofce tools used in the workplace and be able to utilizethem.Capabilitytoutilizeofcetoolsandotherapplicationsoftwareandgroupwareusedintheworkplace considering efciency in carrying out tasks.Understand thetasks in charge and the relevant problems, and execute requi-sitesolutions:Capabilitytoorganizeprocessesrelatedtothetasksinchargeusingmethodssuchastaskworkows, and to identifyissues.Capabilitytoanalyzedatarelatingtothetasksinchargeusingsimpleanalyticalmethodsand information technology and identify issues.For problematicissues identied, capability to consider solutions independently,and consid-er solutions by accepting the opinions of superiors andco-workers.Collect and utilize informationsafely:Capabilitytoutilizevariouskindsofinformationrelatingtothetasksinchargeincompli-ancewith laws andregulations.Capabilitytounderstandthepurposeofinternalcomplianceprogramsandbeabletocon-formto them.Capability to prevent the leakage, loss or damage ofinformation while utilizing internal in-formation devices andsystems, particularly through internet use.Support computerizationof tasks and systemization under the direction ofsu-periors:Capabilitytoparticipateinthediscussionconcerningtheinvestigationandorganizationofdata relating to the tasks in charge under the direction ofsuperiors.Capability to participate in the discussion concerningthe systematization of tasks in charge under the direction ofsuperiors.75Conguration of the ExaminationExam Duration 165minutesExam TypeMultiple-choice (1 out of 4 choices)(1)Shortquestion type (1 exam question contains 1 question)(2)Mediumquestiontype(1examquestioncontains4questions.Theques-tionsexamineknowledgeandunderstandingfromseveralviewpointswithregard to a single situational setting). Number of Questions100questions, answers required for all questions(1)Short questiontype: 88 questions(2)Medium question type: 12 questions (3 examquestions consisting of 4 sub-questions each)Number of Questionsper FieldQuestions are asked according to the following ratio withregard to the 3 elds comprising the scope of questions:(1)Strategyeld: about 35%(2)Management eld: about 25%(3)Technology eld: about40%Point Allocation 1,000 total pointsGradingMethodAccordingtorawpoints(pointsareallocatedforeachquestion,andallocated points for correctanswers are totaled)Pass criteriaA pass is granted when both (1)and (2) below are satised:(1)Total points (totaled from each eld):more than 60% of maximum points(2)Points in each eld: more than 30%of the maximum points in each of the 3 elds.Scope of QuestionsThissection describes the basic approach for the ex-amination questionsand the scope of the examination questions.91Basic Approach forExamination QuestionsThe following section summarizes the basicapproach for questions that appear in the IT Passport Examination,in the respective elds of strategy, management, andtechnology.STRATEGYQuestions in the examination are designed totest knowledge in the following areas: fundamental terminology andconcepts necessary to analyze computerization and corporateactivities, as well as fundamental terminology and conceptsdescribed in information courses through post-second-ary educationand in general newspapers, books, and magazines. Also included arequestions that test the fundamental knowledge of methods forsolving problems by grasping and analyzing the work at hand, andthe fundamental knowledge for utilizing ofce tools to analyze dataand solveproblems.MANAGEMENTQuestionsintheexaminationaredesignedtotestknowledgeoffundamentalterminologyandconcepts relating to systems development and project managementprocesses. The exam does notincludequestionsthattestknowledgeofspecicandhighlyspecializedterminologyandcon-cepts.Also included are questions that test the basic knowledge forconsidering the development of business environments such as usingcomputers, networks, and ofcetools.TECHNOLOGYQuestionsintheexaminationaredesignedtotestknowledgeoffundamentalterminologyandconcepts,andthelogicalthoughtprocessoftheexaminee.Theexaminationdoesnotincludequestionsofatechnicalandhighlyspecializednature.Alsoincludedarequestionsthattestthe fundamental knowledge forsafely using the systems on hand.2Scope of QuestionsCommonCareer/Skill Framework Scope of questions to be asked (Concept ofexam questions) Field Major Category Middle Category Strategy1Corporate and legal affairs 1 Corporate activitiesAskaboutthefundamentalconceptsaboutcorporateactivitiesand businessmanagement.Askaboutthetechniquesforanalyzingfamiliarbusinesstasksand resolvingissues, the concept of PDCA, and operational planning us-ingtechniques such as Pareto charts.Askaboutthevisualexpressionsusedforunderstandingbusiness tasks,such as workow.Askaboutthefundamentalconceptsofaccountingandnancialaf-fairs, suchas nancial statements and break-even points. 2 Legal affairs Askabout the familiar laws of workplaces, such as intellectualprop-erty rights (copyright, industrial property rights, etc.), Acton the Pro-tection of Personal Information, Labor Standards Act,and Act for Se-curing the Proper Operation of Worker DispatchingUndertakings and Improved Working Conditions for DispatchedWorkers. Ask about the concepts and characteristics of softwarelicense, such as license types and license management.Askabouttheconceptsofcorporaterulesandregulations,suchas complianceand corporate governance. Ask about the signicance ofstandardization.Scope of Questions10Common Career/Skill FrameworkScope of questions to be asked (Concept of exam questions) FieldMajor Category Middle Category Strategy2 Business strategy3Business strategy managementAskaboutthefundamentalconceptsabouttypicalmanagementin-formationanalysistechniquesandbusinessmanagementsystems,such as SWOT analysis, PPM (Product Portfolio Management),cus-tomer satisfaction, CRM, and SCM. Ask about the fundamentalconcepts relevant to marketing.Askaboutthetypicalinformationanalysistechniquesforplanning businessstrategies. Askabouttheunderstandingoftheuseofofficetools (softwarepackages) such as spreadsheet software, database software, etc.4Technological strategy management Ask about the understanding ofthe signicance and purpose of tech-nology development strategy. 5Business industryAskaboutthecharacteristicsoftypicalsystemsinvariousbusiness eldssuch as e-commerce, POS systems, IC cards, and RFID appli-cationsystems. Askaboutthecharacteristicsoftypicalsystemsintheengineeringled and e-business.Askaboutthecharacteristicsandtrendsofintelligenthomeappli-ances andembedded systems. 3System strategy 6System strategy Ask about thesignicance and purpose of information system strate-gies and theconcepts of strategic goals, business improvement, and problemsolving. Ask about the concepts of typical modeling in businessmodels. Askabouttheeffectiveuseofgroupwareforcommunicationandofofce tools.Askaboutthepurposeandconceptsofincreasingoperationalef-ciency byusing computers and networks. Ask about the concepts of solutionsthrough typical services. Ask about the signicance and purpose ofthe promotion and evalua-tion activities of system utilization.7System planning Ask about the purpose of computerization planning.Askaboutthepurposeoftheoperationalrequirementsdefinition based onthe analysis of current state. Ask about the fundamental ow ofprocurement, such as estimates, RFPs, and proposals. Management4Development technology8 System development technology Ask about thefundamental ow of the process of software develop-ment such asrequirements denition, system design, programming , testing, andsoftware maintenance. Ask about the concepts of the estimate insoftware development. 9 Software development management techniquesAsk about the signicance and purpose of typical developmentmeth-ods.5 Project management10 Project management Ask about thesignicance, purpose, concepts, processes, and meth-ods of projectmanagement.6 Service management11 Service management Ask about thesignicance, purpose, and concepts of IT service man-agement. Askabout the understanding of related matters such as help desks.Askabouttheconceptsaboutsystemenvironmentmaintenance, such ascomputers and networks.12 System audit Ask about the signicance,purpose, concepts, and target of system audit.Askabouttheowofsystemaudit,suchasplanning,investigating, andreporting. Ask about the signicance, purpose, and concepts ofinternal control and IT governance. Technology7 Basic theory 13Basic theory Ask about the fundamental concepts about radixincluding the char-acteristics and operations of binary numbers.Askaboutthefundamentalconceptsaboutsets,suchasVenndia-grams,probability, and statistics.Askaboutthefundamentalconceptsofhowtoexpressinformation content,such as bits and bytes, and of digitization. 14 Algorithm andprogrammingAskaboutthefundamentalconceptsofalgorithmsanddatastruc-tures, andhow to draw ow charts. Ask about the roles of programming.Askaboutthetypesandfundamentalusageofmarkuplanguages, such as HTMLand XML. 11Common Career/Skill Framework Scope of questions to beasked (Concept of exam questions) Field Major Category MiddleCategory Technology8 Computer system15 Computer componentAsk aboutthe fundamental conguration and roles of computers. Ask about theperformance and fundamental mechanism of proces-sors, and the typesand characteristics of memory. Ask about the types andcharacteristics of storage media.Askaboutthetypesandcharacteristicsofinput/outputinterfaces, devicedrivers, etc. 16 SystemcomponentAskaboutthecharacteristicsofsystemcongurations,ofthetypesof processing, and of the types of usage. Ask about thecharacteristics of client/server systems. Ask about thecharacteristics of Web systems.Askabouttheconceptsofsystemperformance,reliability,andeco-nomicefciency. 17 Software Ask about the necessity, functions, types,and characteristics of OSs.Askabouttheconceptsanduseofbasicfunctionsoflemanage-ment, such asaccess methods and search methods, and the funda-mental concepts ofbackups. Ask about the characteristics and fundamental operationsof software packages, such as ofce tools. Ask about thecharacteristics of OSS (Open Source Software). 18 Hardware Askabout the types and characteristics of computers. Ask about thetypes and characteristics of input/output devices. 9 Technicalelement19 HumaninterfaceAskabouttheconceptandcharacteristicsofinterfacedesign,suchas GUI and menus. Ask about the concepts of Web design. Ask aboutthe concepts of universal design. 20 Multimedia Ask about the typesand characteristics of encodings such as JPEG, MPEG, and MP3. Askabout the purpose and characteristics of application ofmultime-diatechnology,suchasVR (VirtualReality)andCG (ComputerGraphics).Askaboutthecharacteristicsofmedia,andcompressionandde-compressionof information data. 21 Database Ask about the signicance, purpose,and concepts of database man-agement systems (DBMS). Ask about theconcepts of data analysis and design, and the charac-teristics ofdatabase models. Ask about the manipulation methods such as dataextraction. Askaboutdatabaseprocessingmethodssuchasexclusivecontroland recovery processing. 22 NetworkAskaboutthetypesandcongurationsofLANandWANregarding networks, andthe roles of Internet and LAN connection devices. Ask about thenecessity of communication protocols, and the roles of typicalprotocols. Ask about the characteristics and fundamental mechanismof the In-ternet. Ask about the characteristics of e-mail andInternet services.Askabouttheunderstandingofthetypesandcharacteristics,ac-counting,and transmission rates of communication services, such as mobilecommunication and IP phones. 23 SecurityAskaboutthefundamentalsofinformationsecurityfromtheview-point ofsafe and secure activities in a network society.Askabouttheinformationassets,thepurposeofriskmanagement, and theconcepts of information security policy.Askabouttheconcepts,types,andcharacteristicsoftechnologicalsecurity measures, such as measures against computer viruses.Askabouttheconcepts,types,andcharacteristicsofphysicaland humansecurity measures, such as entrance/exit control and accesscontrol.Askaboutthetypesandcharacteristicsofauthenticationtechnolo-giessuch as ID, password, callback, digital signature, and biometricauthentication. Ask about the mechanisms and characteristics ofencryption technol-ogy such as public keys and private keys.Chapter 1Corporate and legal affairs ....... 14Chapter 2Businessstrategy ..................... 64Chapter 3Systemstrategy........................ 90STRATEGY1-1Corporateactivities............................151-2Legalaffairs........................................ 431-3Chapterquiz.......................................60Chapter1explainsthebasicknowledgeofcorporateactivitiesandbusinessmanagementthatbusiness workers should possess,as well as legal compliance and corporate ethics.1ChapterCorporateand legal affairs151-1-1Management andorganizationItisimportanttohaveanoverallunderstandingofacorporationintermsofbusinessactivities,objectives,andrelevantlawsinordertorecognizeandresolveissuesinresponsiblebusinessareas,andfacilitatetheexecu-tionof operations.1Corporate activitiesIn conducting corporateactivities, it is important to clearly understand the importance ofexistence of the corporation and its values. If these are notclearlydened,thecourseofcorporateactivitiesbecomesuncertain.Nomatterhowhardeachemployeeintheirresponsiblebusinessareaworks, suchefforts will lack efciency if they are not properlyguided.Understanding the goals and responsibilities that acorporation should des-ignate will lead to well-balanced corporateactivities.(1)Corporate philosophy and corporate objectiveThepurpose of corporate activities is to earn prots and contribute tosoci-ety. Accordingly, corporations adopt a corporate philosophyand cor-porate objective in which to conduct its activities.Corporate philosophy and corporate objective are universal idealsthat essentially do not change.However, the environment surroundinga corporation is undergoingsigni-cantchangesintermsofsocialclimate,technology,andotherfactors.Inorder to fulll its corporate philosophy and objective, acorporation mustfromalong-termperspectivedevelopthecapabilitytoadapttosuchchanges.(2)Corporate social responsibilityCSR(CorporateSocialResponsibility)referstotheresponsibilitiesthatacorporationshouldfulfilltosociety.Manycorporationspromotetheir CSR approach through their websites, or publish a CSR reportin or-der to earn public interest and stakeholdertrust.Corporations must endeavor to create business from theperspective of all stakeholders,andnotsolelyforthepursuitofprot.Asevidencedbythe existence of the term corporate citizen,corporations are expected to act as productive members of society.Doing so leads to earning public con-dence and creating newcorporatevalues.CSRAbbreviationforCorporateSocialRe-sponsibility.ReferenceDisclosureof nancialresultsAcorporationshouldendeavortodis-closenancialresultsandotherusefulinformationinatimelyandappropriate mannert ost akehol ders,i ncludi ng shareholdersandinvestors.Improving management transparencyby such dis-closures makes it possible to build trust and enhancecorporate value.ReferenceSRIAbbreviationforSociallyResponsibleInvestment.Corporate activities1-1Reference16Corporate and legalaffairsChapter1Themostbasicresponsibilitiesofacorporationareconductingcorporateactivitiesinalaw-abidingmanner,achievingregulatorycompliance,andprovidingproductsandservicesthatcombinefunctionalitywithsafety.Moreover, CSR is increasingly expected to encompass such aspects asen-vironmental initiatives, social welfare activities, and localcommunity co-operation as corporations explore their approach tosocial contribution.2Management resourcesThe three major elementsthat are essential to the management of a corpo-ration and serve ascorporate resources are people, materials, and money. Morerecently, information has been cited as a fourth element.PeopleFroma corporate perspective, the term people refers to employees(hu-manresources).Peoplearethemostimportantresourceforallcorporateactivities.Enhancinghumanresourcesbyimpartingeachemployeewith thecorporate philosophy and objective, and training them in a mannerthat is consistent with these values can lead to increasedprots.MaterialsFromacorporateperspective,thetermmaterialsreferstoproductsandmerchandise. In the manufacturing industry, it also refers toproduction fa-cilities.Althoughseeminglyunrelated,theservicesindustryisalsode-pendentonavarietyofmaterialssuchascomputers,printers,andcopymachines to facilitate corporate activities.Some materials areessential and others are non-essential. It is important toclearlyidentifythosematerialsthatareessentialandnon-essentialtothecorporate activities of a corporation.MoneyFrom a corporateperspective, the term money refers to funds. Money is required topurchase and make materials, and secure people. Money is anessential resource to fund the execution of corporateactivities.InformationFrom a corporate perspective, the terminformation refers to documentsanddatathatenableacorporationtomakecorrectdecisionsandremaincompetitive.Theeffectiveuseofinformationcanleadtoimprovedpro-ductivity,addedvalue,innovativeideasforactivitiesplanning,andotherpositive results.173BusinessmanagementBusinessmanagementinvolvescoordinatingandintegratingmanage-mentresources (people, materials, money, and information) in order toful-ll the objectives of the corporation. It is important tomaximize the use ofresourcesthatareavailabletothecorporationandproduceresults.Toachieve this, corporations set business objectives and manage themusing a PDCA (Plan, Do, Check, Act)cycle.PDCAisafundamentalapproachforbusinessmanagementthatin-volvesthe execution of a four-step cycle of Plan, Do, Check, Act tocon-tinuously improve product quality and work. Repeated executionof PDCA renes and enhances business management.PlanDetermine whatto improve and how.CheckEvaluate resultsfrom Do.ActImplementmeasures toimprove results from Check.DoExecute activitiesaccordingto Plan.4Organizational structure of a corporationA corporation isan organizational entity that engages in economic ac-tivities suchas production, sales, and provision of services typically for thepurpose of making prot. In the narrow sense, it refers to a privatecorpo-ration such as a stock company or limited liability company.In the wider sense, it also includes public corporations in whichthe government has a stake.An organization is a collective entitythat has been assembled and inte-grated into a system to achieve acommon purpose.(1)Structure of a corporationA corporation is anorganization that is structured according to task in or-der toconduct operationsefciently.Therearevariousformsoforganizationsincludingfunctionalorganiza-tions,divisionalsystemorganizations,matrixorganizations,andprojectorganizations.ReferenceManagementresourcesfor businessmanagementManagementresourceswithinthecon-textofbusinessmanagementrefertopeople (humanresources),materials (assets), money (nances) andinforma-tion (information management).ReferenceBusinessobjectiveAbusinessobjectiveisamedium-or long-term goal that is setin order to ful-fillthecorporatephilosophyorcorpo-rateobjective.ReferenceFormalorganizationAformalorganizationisacollectiveentitythatisclearlydefinedbyanor-ganizational purpose or companyrules. Formalorganizationsincludecompa-nies andinstitutions.ReferenceInformal organizationAn informal organizationis a collectiveentitythatisnotclearlydenedbyor-ganizationalrulesorregulations,al-thoughit has an overall purpose.18Corporate and legal affairsChapter1Functional organizationA functional organization is structured byjob function such as manu-facturing, sales, marketing, accounting,and human resources. This type of organizations key characteristicis that it enables the pursuit of specializa-tion and efciency ineach job function, which in turn allows each organi-zation toproduce high quality results. At the same time, there is a tendencyfor boundaries to develop between each functional organization, andissues can arise from departments acting in their bestinterest.Afunctionalorganizationiscomprisedofaline(direct)department andastaff (indirect)department.Alinedepartmentisdirectlyin-volved in the areas of earning protsuch as sales, production, and materi-als. A staff departmentsupports the line department in areas such as human resources,accounting, and general affairs.ManagementSalesdepartmentProductiondepartmentHuman resourcesdepartmentLine(direct)departmentAccountingdepartmentStaff(indirect)departmentHierarchical organizationA hierarchicalorganization is an organization form with a hierarchical structureso that there is typically one chain of command. For example, inahierarchicalorganization,thereareanumberofdepartmentsbelowthepresident.Belowthesedepartmentsaresectionsthatareresponsiblefordifferent business segments.This organizations key characteristicis that it facilitates the spread of cor-porate policies throughoutthe organization.Board of directorsManagement department Salesdepartment ManufacturingdepartmentHumanresourcesGeneralaffairsCorporatesalesConsumer salesPlant X Plant YDivisional system organizationA divisional systemorganization is separated along the lines of prod-uct, region, ormarket with each business division having its own staffde-partment, either partially or in entirety.This organizations keycharacteristic is that since each business division is capable ofperforming a broad base of functions, it is possible to issueuni-ed directions so as to rapidly accommodate shifting marketneeds.ReferenceStaffdepartmentandlinedepartmentThestaffdepartmentincludesthefol-lowing departments:Human resources, accounting, gener-al affairs, and informationsystems.The line department includes the follow-ing departments:Sales, production, and materials.19In principle, each businessdivision conducts its own accounting, and is re-sponsible foroperating business and generating prots independently.ManagementXbusiness division Y business division Z business divisionProductionSales Accounting Production Sales Accounting Production SalesAccountingMatrix organizationA matrix organization is anorganization form often employed byma-jorenterprisesandglobalcorporations,andisstructuredalongmultiplechains of command such as function and region or function andproduct.Since this organization takes the form of multiple managersoverseeing thepersonsthatdothework,thereispotentialforconfusioninthechainofcommand. Atthesametime,departmentalboundariesareeliminateddue tothe sharing of work.Project XProject YProjectZDevelopmentdepartmentPlanningdepartmentResearchdepartmentMarketingdepartmentCompanysystemorganizationAcompanysystemorganizationreferstoastructurethatseparatesbusiness divisions, and administrates the departments asindependentcom-panies.Thisincreasestheautonomyoftheorganizationandenhancesitsabilitytoadapttoitsenvironment. Theorganizationalstructureissimilartothedivisionalsystemorganization,butunderthecompanysystemor-ganization,there is greater freedom and discretion to make human resourc-esdecisions.Board of directorsCompany X Company Y Company ZSalesPlant Sales Plant Sales Plant20Corporate and legal affairsChapter1Project organizationA project organization is temporarilystructured along the lines ofper-sonnelwhohavevariousspecializedcapabilities,andisseparatefromastanding organization. It is only intended as a temporaryorganization and is disbanded once the purpose is achieved.ProjectXDevelopmentdepartmentMarketing departmentPlanningdepartmentResearch department(2)Departmental structureThe corporateorganization is comprised of departments that are sepa-rated by thecontent of work they are responsible for. To facilitatecompu-terization, it is necessary to have a precise grasp of wherea department is positioned within the corporation.The departmentalstructure and content of work are summarized below.DepartmentContent of workHuman resources(Labor)Hire and train personnel, andassign them to departments. Engage in various types of work that isemployee-related.Accounting(Finances)Manage the funds that supportthe business infrastructureofthecorporation.Inadditiontoprocuringandadminis-trating funds, insome corporations the accountingdepart-mentalsomanagescorporateassetsandevaluatesthe businessresults.General affairs Coordinate between the departments andperform admin-istrative management.Information systemsDevelopandmanageinformationsystemswithinthecor-poration.Staffedwithspecialistssuchassystemengi-neers,programmers, and systems operation engineers.Marketing Performmarket research.Research and develop-mentProvide technicaldevelopment and research for newprod-ucts.Sales(Marketing)Selltheproductsorservicessuppliedbythecorporationdirectly to the customer.Typically includes paymentcollection.Production(Manufacturing)Manufactureproducts.Insomecorporations,productionalso incorporates the function of the materialsdepartment.Materials(Purchasing)Procures materials required forproduct manufacturing and business operations.21ReferenceOROR is aset of scientic techniques for determining and implementingbusiness pl ansi nacorporat i on,whi chhasemergedasafieldofappliedmathe-matics andcomputing.Drawingwidelyfromtechniquesand tools of science, it is amethod for ana-lyzingtheproblemsinvolvedinagiventaskanddiscoveringtheoptimalsolu-tion.Abbreviation for OperationsResearch.ReferenceIEIEisamethodforstreamliningtheprocessesinvolvedinmanufacturing,construction,etc.Morespecically,it usesavarietyofmethodstostudythetimeinvolvedinatask,toplanand managedailyschedules,tomanagecosts,etc.Itiswidelyusedonthepro-duction eld as a technique forimprov-ing operations.AbbreviationforIndustrialEngineer-ing.1-1-2OR(Operations Research) and IE (Industrial Engineering)OR (OperationsResearch) is a method for analyzing and solving prob-lems thatarise in business administration. IE (Industrial Engineering),Meanwhile,isamethodforimprovingproblemsthatariseintheproduc-tioneld or services.Because of the great impact that people, materials,money, and information have on the conduct of business activities,it is important to analyze, solve, and improve problems that ariseat both the managerial level and the eld level.1UnderstandingoperationsVariouskindsofchartsanddiagramsareusedinORandIEtoanalyze,solve, and improve work issues.The followings are used tounderstand operations.Illustrating the ow of work WorkowExplicatingthe structure of problems Associationdiagram,treediagram,affinitymapExpressing relationships Matrix diagram, matrix dataanalysisExpressing trends over time Z graphExpressing distributionsDistribution diagram, portfolioUsed in planning and managementGantt chartWorkflowA workflow shows tasks as linked chains ofactions. Using a workow makes it possible to recognize whichdepartment is carrying out what task, and what relationships thereare between which departments.Customer Sales Marketing WarehouseAccountingOrders productReceives productIssues paymentReceivesorderBooks order Checks inventoryRequests product shipmentChecksproductShips product Settles payment for product22Corporate andlegal affairsChapter 1AssociationdiagramAnassociationdiagramindicatesbyarrowsrelationshipsbetweencauses and effects or goals and methods to explicate the structureof aproblem.Thisisusefulwhenaproblemthatneedssolvingiswell-estab-lished,but the causes behind it are convoluted.This method may go throughseveral rounds of revisions by multiple team members who willapproach the problem from different angles, effectively getting atthe root of the problem, and helping to nd a solution.SimpletaskIncrease in mistakesNew person added Procedure deterioratesWorkefficiency deterioratesIncrease of malfunctionsObsoleteinfrastructureLack of concentration: Cause: EffectIncrease inchatterTreediagramAtreediagramisamethodforhierarchicallyexpressingachainofgoals and means in order to discover ways to solve a problem. Theproc-essofcreatingatreediagramandthecompletedresultscanprovidespe-cicpolicies and actions for resolving the problem.GoalMeans forimprovingwork efficiencyMeans forequipment measuresStaffeducationImproved allocationIntroduce new modelRe-examineoperationsEquipment measuresStaffing measuresImproveworkefficiencyMeans forstaffing measures23Affinity diagramAnaffinity diagram is a way of summarizing mutual afnities betweendata, organizing data into named groups, and analyzing data. It caneluci-date vague problems and clarify trouble-spots.DecliningsalesProductFew products in line with needsHigh prices compared tocompetitorsNegotiations with customersNot making proposals thatrespond to customer needsNot knowing key decision-makersNotfollowing up periodicallyMatrix diagramA matrix diagram organizeselements to be analyzed into rows and col-umns, marks theirrelationships at their intersections to dene the existenceandformofaproblem,andsparksideasthatleadtosolutions.Viewing theseintersections as starting points for ideas is an effective way tosolve problems.Company name Skill Service Delivery date CostCompanyA Excellent OK Good BadCompany B OK Good Good OKCompany C Bad OKBad ExcellentCompany D Excellent OK Bad GoodCompany E GoodExcellent OK Good24Corporate and legal affairsChapter 1Matrix dataanalysisMatrix data analysis is a method for organizing dataproperties when itispossibletoexpresstheinterrelationshipsamongmultipledatamatricesas numerical data. It makes it possible to grasp thecharacteristics of each element when a large volume of data makesthe overall picture difcult to understand.TechnicalskillTrainee AA5 910555.2 (average)107 8 BB9 2 CC4 7 DD1 9 EE5.2 7.0AverageAdministrativeskillAdministrative skill Skill tableIffocusing on technical skills, choose B, CTechnical skillZ graphA Zgraph expresses trends over time, and is named after the Z shapethat the lines assume.For example, this graph shows revenues,cumulative revenues, and moving totals(cumulativeoverpastyear).Ifthemoving-totaltrendlineisrising, thensales results are solid; if the line is dropping, then results arepoor.Sales results tableThis yearNov Dec Jan Feb Mar Apr May JunJul Aug Sep Oct Nov DecSales 90 70 70 50 90 110 80 100 70 60 80 90100 80Total 790 840 70 120 210 320 400 500 570 630 710 800 900980Moving total 820 840 860 880 890 910 930 940 940 940 950 960 970980120010008006004002000Jan FebMar Apr May JunJulAug Sep Oct NovDecProfitTotalMoving totalAmountPeriod25Distribution diagramAdistribution diagram represents the number of elements that fallinto each quadrant to show theirdistribution.Forexample,thisgraphchartstheprotabilityofproductsagainsttheirsalescontinuity.ProfitabilityContinuityProductCProductEProductDProductBProductAPortfolioAportfolio is a graph that represents distributions.For example, inthe graph shown here, each area visually represents sales volumeand market share.Area A Area DArea B Area CMarket shareSalesvolumeGantt chartA Gantt chart indicates by horizontal bars torepresent work schedules and results. The horizontal axis is markedto indicate hours, days, months, etc., and individual tasks orprojects are stacked vertically.PlanDesignOperation1 2 3 4 5 6 7 8(week)ReferenceManagement sciencemethodManagementsciencemethodisthe useofari thmeti cmethodstosol veproblemsastheyapplytobusiness. Time-seriesanalysiscanbeusedtopredictfuturesalesbyanalyzingpast productsalestrends,whileportfolioanalysisandinvestment-calculation models can be used to makedecisions.ReferenceManagement sciencemethodManagementsciencemethodisthe useofari thmeti cmethodstosol veproblemsastheyapplytobusiness. Time-seriesanalysiscanbeusedtopredictfuturesalesbyanalyzingpast productsalestrends,whileportfolioanalysisandinvestment-calculation models can be used to makedecisions.26Corporate and legal affairsChapter 12Job analysis andoperational planningTables and charts are used to analyze data, andmaking graphs can help to improve businessprocesses.Themethodsusedforjobanalysisandoperationalplanningaresumma-rizedbelow.Expressing the impact of a job Pareto chart, ABCanalysisExpressing the order of tasks and number of days ArrowdiagramExpressing distributions Scatter diagram, histogramComparingand balancing multiple elements Radar chartExpressing the status ofa process Control chartExpressing big/small relationships BarchartExpressing proportions of a whole Pie chartExpressing trendsover time Line chartExpressing predictions RegressionanalysisPareto chartA Pareto chart shows total values for multipleelements arranged in de-creasing order as a bar chart, overlaidwith a line chart showing cumulative values for allelements.Forexample,inthechartshownhere,householdappliancesarearrangedby sales volumes, running from personal computers down to washingma-chines.Unit sales Cumulative unit salesCumulative values ofbars1001201408060402001002030405060AirconditionerTelephoneTelevisionRefrigeratorWashing machinePersonalcomputer27ABCanalysisAnABCanalysisisamethodforclarifyingtheimportanceorpriorityof multiple elements (products, etc). This is useful in numerousaspects ofbusinessadministration,includingsalesstrategyandmanagement,inven-torycontrol,etc.ItusestheParetochart,withelementsarrangedinde-creasingorder of priority, and divided into three categories: A, B,C.Ingeneral,thetop70%groupisgroup A,the7090%groupisgroupB, and theremainder is group C.For example, in the example chart, personalcomputers and aircondition-erscombinedmakeup70%ofsales,sothosetwoproductscomposeGroup A, suggesting that product management should give greaterweight to them.Total units sold=130Unit sales120100%90%80%8070% A(Important) 70%60%6050%40%4030%20%2010%0%0100Group APersonalcomputerAir conditionerGroup BTelephoneTelevisionGroupCRefrigeratorWashingmachinePersonalcomputerAirconditionerTelephoneTelevisionRefrigeratorWashingmachineArrow diagramAn arrow diagram is a method forpreparing better activity plans. Itor-ganizesthesequentialrelationshipsbetweentasksandthedaysrequiredindicated by arrows. It is also used as a PERT chart.For example,the diagram here shows that task E can begin once both tasks C andD are complete.1 234 5Task A5 daysTask C5 daysTask B Task D3 days 4daysTask E2 daysReferenceCritical pathA critical path in scheduleplanning, is the path down the middle of thesched-ulethattakesthegreatestnumberofdays.Becauseanycritical-pathactivity fal l i ngbehi ndwi llcausetheenti re scheduletofallbehindaswell,thoseactivitiesdemandspecialmanagementattention.ReferencePERTAbbreviationforProgramEvaluation and ReviewTechnique.28Corporate and legal affairsChapter 1ScatterdiagramAscatterdiagramplotstwopropertyvaluesontheX-and Y-axestoshow the correlation between two kinds of data.For example, thepositive correlation graph plots volume of cold beveragesalesagainsttemperature,showingthatastemperatureincreases,salesofcoldbeveragesincreases.Thenegativecorrelationgraphplotshotbever-agesales against temperature, showing that as temperature increases,sales ofhotbeveragesdecrease.Thenocorrelationgraphplotsmagazinesales against temperature,showing that the two are not related.Positive correlation Negativecorrelation No correlationTemperature Temperature TemperatureSalesof cold beveragesSales of hot beveragesSales of magazinesRadarchartA radar chart is used to compare and balance multipleelements.Forexample,thischartshowsthebalancebetweenscoresastudentre-ceivedon tests in various subjects.20406080100EnglishJapanesehistoryMathematicsJapaneseCompositionBiologyReferenceCorrelationCorrelationrefers to a relationship be-tweentwopropertiessuchthatasthevalueforoneincreases,theotherde-creases. When the relationshipbetween these two is nearly linear, the two prop-erties are said tobe correlated.29ControlchartAcontrolchartexpressesthestatusofworkprocessesusingalinechart.For example, the chart here shows irregular points based onthe following criteria:Any points outside the control bounds,either high or lowIf there are six or more points in a row above orbelow the centerline, the sixth point and beyond.Based on thesecriteria, there are three points judged to be irregular in theexample chart.Upper limitMedian data valueLower limitUppercontrolboundIrregularity biased to one side ofmedianCenterlineLowercontrol boundIrregularity out ofboundHistogramAhistogramisamethodforrepresentingthenumberofelementsineachgroupasabargraph,dividingtotaleddataintosomenumberof groups.Ahistogram can reveal an overall picture of the data, the centralposition, range of variation,etc.Forexample,thischartshowstheresultsofasurveyofcellularphoneowners in a certain city broken down by age group, revealing thatcellular phonesaremostcommonamongpeopleaged21-30,followedbypeopleaged10-20,then31-40,andthattheywereleastcommonamongpeople aged 51and over.Number of peopleAge bracket504030201010 153554b96e
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