1.1Corporate activities

This section covers how a company as an organization makes decisions, tracks its financial position, and drives improvement. The Strategy field of the IT Passport exam is an entry point into management studies—rather than memorizing terms by rote, the goal is to picture what each mechanism is for.

1.1.1Corporate organization and OODA/PDCA

• An organizational structure is how roles are divided. Common forms include a functional organization (divided by function, such as development, sales, or accounting), a divisional organization (independent, self-accounting divisions by product or region), and a matrix organization (a dual chain of command combining function and product/region).
• PDCA (Plan-Do-Check-Act) is a cycle of continuous improvement: plan, execute, evaluate, and improve, repeated over and over. It is a standard framework for quality management and process improvement.
• OODA (Observe-Orient-Decide-Act) is a fast loop of observing, orienting, deciding, and acting. Where PDCA is a plan-driven improvement cycle, OODA emphasizes making quick judgments and acting fast amid rapidly changing conditions.

1.1.2Accounting, finance, and the break-even point / inventory valuation

• The income statement (P/L) shows profit from revenue and expenses over a period of time—"how much did we earn this year." The balance sheet (B/S) shows the balances of assets, liabilities, and net assets at a point in time—"what do we own and owe right now."
• The break-even point is the sales volume or revenue at which revenue exactly equals cost (fixed cost + variable cost), so profit is zero. Selling beyond this point yields a profit; selling below it results in a loss.
• Inventory valuation is how the value of remaining stock is assessed. Methods such as first-in, first-out (FIFO) (assuming the oldest stock is used first) exist, and the calculated profit can differ depending on the method chosen.

Picture yourself running a small general store to walk through this section's concepts. At year-end, drawing up an income statement shows "sales were 9 million yen, costs were 8 million yen, so profit was 1 million yen"—the store's one-year performance. A balance sheet, on the other hand, shows "right now we hold 2 million yen in cash and 1.5 million yen in inventory, with 1 million yen in borrowings"—the store's current financial position. If fixed costs (rent, payroll, etc.) run 500,000 yen a month and the variable cost per item (cost of goods) is 40% of the selling price, calculating the break-even point tells you how much you need to sell each month to avoid a loss. At year-end you take stock of remaining inventory, but for goods whose purchase price fluctuates over time, the inventory valuation method (such as first-in, first-out) changes how much value is assigned to the remaining stock—and therefore changes the calculated profit. In day-to-day improvement, you run PDCA: measure customer-service time this month (Plan), carry it out (Do), check the correlation between service time and sales (Check), and adjust staff shifts (Act). But for a sudden change, like a competitor opening nearby overnight, you need OODA-style thinking: quickly observe the situation, judge, and act right away. On the quality side, you might use a Pareto chart from the seven QC tools to visualize which complaint causes are most frequent and prioritize accordingly.

1.1.3Section summary

• P/L = profit over a period; B/S = financial position at a point in time. Organizations include functional, divisional, and matrix forms
• The break-even point is the sales level at which profit is zero. The inventory valuation method affects calculated profit
• PDCA is plan-driven continuous improvement; OODA is fast adaptation to change. OR/IE tools like the seven QC tools quantify quality and productivity