Business Organisation
Functional Areas
Businesses are divided into different departments that work towards meeting the needs of the business. These departments are known as 'FUNCTIONAL AREAS'.
The functional areas are:
Each department has certain tasks that it must complete to allow the business to succeed. It is important that all functional ares work effectively and efficiently to allow the business to succeed.
Finance
Finance is responsible for the following:
- Monitoring spending
- Loans
Human Resources (HR)
Human Resources is responsible for the following:
- Person Specifications
Marketing
Production/Operations
Administration and IT
Consequences for a business if the functional areas do not operate efficiently together
It is Important that areas are operating together getting the job done and avoiding repetition for a business to be successful.
Consequences otherwise may be:
Example exam question and answer
‘Evaluate the consequences for a business you have studied if the functional areas do not operate efficiently”
Businesses are divided into different departments that work towards meeting the needs of the business. These departments are known as 'FUNCTIONAL AREAS'.
The functional areas are:
- Finance
- Human Resources
- Marketing
- Operations
- Administration and ICT
Each department has certain tasks that it must complete to allow the business to succeed. It is important that all functional ares work effectively and efficiently to allow the business to succeed.
Finance
Finance is responsible for the following:
- Cash flow
- Monitoring spending
- Preparing accounts
- Raising finance
- Loans
Human Resources (HR)
Human Resources is responsible for the following:
- Recruitment and retention
- Person Specifications
- Redundancy
- Motivation
- Training staff
- Health and safety and conditions at work
Marketing
- Market research
- Product
- Promotion strategies
- Pricing strategies
- Sales strategies
- The sales team
Production/Operations
- Acquiring resources (Materials)
- Planning/Making the product
- Monitoring costs
- Future output levels
- Monitoring Quality
Administration and IT
- Looks at the business as a whole
- Managing property – cleaning, health and safety, maintenance, security
- Reception
- Clerical work – reporting, recording, record keeping, communication
- Overview of quality control
- Use of IT systems
Consequences for a business if the functional areas do not operate efficiently together
It is Important that areas are operating together getting the job done and avoiding repetition for a business to be successful.
Consequences otherwise may be:
- Staff morale / motivation may fall
- Profits for owners may fall
- lack of communication
- repetition of tasks / tasks not completed by any department
- Lack of co-ordination
- Loss of customers if customer service is inefficient
- Poor cash flow
- Recruitment issues
Example exam question and answer
‘Evaluate the consequences for a business you have studied if the functional areas do not operate efficiently”
"If the human resources person does not speak to
everyone else then he/she might not know when
someone has left and would not recruit a
replacement . Any staff need to be paid, so human
resources has to talk to finance to make sure they
are paid or else the staff might not be happy and
may leave. Both these things could leave the
business might be short staffed so they staff may
have to work longer hours and be less motivated or
the business will have to close and as a
consequence it could lose customers and it is also
likely to lose money as well."
everyone else then he/she might not know when
someone has left and would not recruit a
replacement . Any staff need to be paid, so human
resources has to talk to finance to make sure they
are paid or else the staff might not be happy and
may leave. Both these things could leave the
business might be short staffed so they staff may
have to work longer hours and be less motivated or
the business will have to close and as a
consequence it could lose customers and it is also
likely to lose money as well."