Functional Areas
Introduction to functional areas
Introduction to the functional areas
A functional area is a group of workers with similar skills and expertise who carries out a specific organisational role
The four most common functional areas include human resources, finance, marketing, and production
Businesses often split their work in this way to improve efficiency with specialists capable of working at a high standard on specific tasks
These business functions are sometimes outsourced to specialist service providers
This can reduce costs and ensure access to advice from specialists who may be expensive to employ directly
Functional areas
Operations
Operations
The operations function is centred on creating the product or delivering the service that the business offers to customers, including
Ensuring the quality of output
Sourcing and purchasing raw materials and components
Managing the design and testing of new products
Inventory management
Marketing
Marketing
Marketing focuses on understanding the needs and wants of both existing and potential customers, including
Researching the market to plan products that meet consumer demand
Organising their distribution
Persuading customers to purchase a company’s goods or services
Determining pricing tactics that attract and retain customers
Finance
Finance
The finance department is tasked with managing the organisation’s money, including
Recording all incoming and outgoing financial transactions
Collecting debts owed to the business
Ensuring that bills and salaries are paid on time
Setting and maintaining budgets
Conducting financial forecasting
Managing banking operations
Preparing the annual financial report
Human resources
Human resources
The human resources (HR) function is responsible for managing the workforce within an organisation and ensuring employee welfare, including
Recruitment and selection
Training and development
Maintaining healthy industrial relations
Ensuring compliance with health and safety regulations