Presentation is loading. Please wait.

Presentation is loading. Please wait.

What different functional areas exist within businesses?

Similar presentations


Presentation on theme: "What different functional areas exist within businesses?"— Presentation transcript:

1 What different functional areas exist within businesses?
What activities does each functional area perform? How do functional areas rely on each other? Learning objectives

2 Delivering key functions
Businesses must be run efficiently to achieve their aims and objectives. To be able to sell products, specific functions must be performed by the staff regularly. In small businesses, individual people complete the functions. In medium or large businesses, such as Tesco, the functions are performed by individuals working as members of functional areas, or departments. Teacher’s note: A Tesco store has many different departments. Some of these include Customer Services, Operations, Production, Administration, Finance and Accounts, Marketing, Sales, Management, Human Resources, ICT, Research and Development. Information about Tesco can be found at This weblink was working correctly at the time of publication. Boardworks takes no responsibility for the content of external sites. Photo: © Tesco PLC How many departments do you think a Tesco store might have? What are they?

3 Case study: Thorpe Park and Tesco
Company: Thorpe Park Mission: achieve aims and objectives Company: Tesco Mission: achieve aims and objectives Which departments would help these companies complete their missions? Human Resources Finance & Accounts Administration IT Support Marketing Sales Customer Services Research & Development. Teacher’s note: The jobs each functional area performs are given below: Human Resources takes care of the staff Finance & Accounts tracks the business’s revenue and costs Administration performs clerical duties IT support sets up the computers for the staff and deals with their problems Marketing finds out what customers want and tries to give it to them Sales tries to sell the products to the customers Customer Services responds to the needs of customers Research and Development designs and improves goods and services. Information about Thorpe Park can be found at this address: Information about Tesco can be found at this address: These weblinks were working correctly at the time of publication. Boardworks takes no responsibility for the content of external sites. Do you know what jobs each functional area performs?

4 Human Resources (HR) Human Resources (HR), also known as Personnel, is the functional area in a business that performs tasks relating directly to the employees:

5 Case study: Tesco Tesco is the UK’s biggest private sector employer with over 260,000 employees. Its core purpose is: to create value for customers to earn their lifetime loyalty. Tesco manages its staff through its HR department. It offers them benefits, such as childcare vouchers, share schemes and pensions, to initially attract them to the company and also to stop them from leaving. Teacher’s note: Here are a few reasons why the Human Resources department needs to look after Tesco’s staff properly: They might leave, creating a labour shortage. This would affect Operations and any other departments where staff leave. They will not work efficiently, affecting the quality of products and creating more work for Operations and Customer Services. Recruiting the wrong people will cost Tesco money to have them replaced. Tesco might be sued if its employees are not treated properly. Tesco can only fulfil its core purpose if its staff perform their functions properly. Unhappy staff will work inefficiently and will stop Tesco from meeting its objectives. Information about Tesco can be found at this address: This weblink was working correctly at the time of publication. Boardworks takes no responsibility for the content of external sites. Photo: © Tesco PLC How do you think the Human Resources department affects the other departments?

6 Finance and Accounts Finance and Accounts record and manage the revenue and costs of the business to calculate how much profit or loss it has made. Teacher’s note: Finance and Accounts affects other functional areas in the following ways: It sets the budgets of the other departments, e.g. how much the marketing department may spend on a campaign, how much Human Resources may spend on recruiting staff, how much Operations may spend on acquiring resources, etc. Failure to keep the accounts correctly could lead to the business going bankrupt or being prosecuted by the Inland Revenue, which would force the business to close. Poor budgeting would prevent the business from being able to improve through personal growth or acquisitions. Information about Tesco’s financial accounts can be found at this address: This weblink was working correctly at the time of publication. Boardworks takes no responsibility for the content of external sites. How do you think the Finance and Accounts department affects the other areas?

7 Administration and IT Support
The Administration and IT Support functions are responsible for a range of tasks which help the business to run smoothly. If the following duties are not performed properly, the other functional areas will not be able to complete their tasks and the business might fail its customers: clerical tasks manning the reception desk cleaning and maintenance health and safety assessments security hardware/software support network management. Teacher’s note: If Administration does not perform the clerical tasks properly then the other departments may not have access to the information they need to perform their tasks, the working environment would be unsafe and equipment or information could be stolen in a burglary. If IT Support do not fix problems with staff computers then the staff will not be able to do their jobs because they will not have access to the right hardware and software. Photo: © carolosseller, shutterstock.com How do the Administration and IT Support functions affect the other departments?

8 Operations and Production
The Operations function is central to any business, no matter what its size. Its chief purposes are to: obtain resources necessary for the business to produce goods or provide services organize the resources in the most efficient and effective way possible. The Production function is responsible for providing customers with whatever the business offers. This usually takes the form of either producing goods or offering services, e.g. Ford manufacture cars, a firm of solicitors offers legal advice to clients. Teacher’s note: Further information about the Operations and Production functions can be found in presentation 2.4 Operations and Production. Photo: © Marcin Balcerzak, shutterstock.com

9 Marketing The role of the Marketing function is to promote the goods or services that the business offers by making customers aware of them. Tasks that the marketing team undertakes include: conducting market research to find out what customers want developing products in line with customers’ needs and wants carrying out promotional activities in order to make customers aware of the business’s services, e.g. advertising, publicity. Teacher’s note: Further information about the Marketing function can be found in presentation 2.2 Marketing. Photo: © rachelcoyne. This image is reproduced under the terms of the Creative Commons License. A copy of the license can be read at this address:

10 Sales Some products are personally sold to customers by specially trained sales staff from the Sales department. Customers often like to ask for advice when buying expensive products. A salesperson can offer this advice and encourage the customers to spend more. The Sales department is often split into further subdivisions: Sales staff sell within the store. Sales representatives travel to the customers. Telesales staff sell over the telephone. Merchandisers display the products strategically. Photo: © OiMax. This image is reproduced under the terms of the Creative Commons License. A copy of the license can be read at this address:

11 How does the Customer Services team affect the other departments?
Customers are the most important part of any business. The Customer Services department is responsible for looking after customers’ needs to make them feel valued. The Customer Services team has a number of tasks: offering information, advice and credit facilities arranging deliveries providing after-sales service managing complaints. Teacher’s note: If customers receive poor customer service then the business will have a bad reputation and other customers will stop buying products. This would negatively affect the other departments and the entire business’s income. Therefore, it is very important that the Customer Services department makes the customers feel valued. Photo: © 2009 Jupiterimages Corporation How does the Customer Services team affect the other departments?

12 Research and Development (R&D)
Unless a business is continually expanding and developing its range of products, it is unlikely to succeed. Sales for a new product should gradually increase – provided that the marketing mix fits the market requirements. However, sales will begin to level and then decline. This sequence is called the product life cycle. Product life cycle Declining sales reduce the business’s income, so large businesses often have a Research and Development team to improve their existing products and to invent new ones. Teacher’s note: The Research and Design team may affect the other departments in the following ways: New designs may require extra staff which would create more work for HR. It cannot design products which would go over the budget set by Finance and Accounts. It probably requires lots of new software for the IT Support team to install. New products may force Operations to acquire new resources and production techniques. Marketing would need to research whether the new designs are successful. The Sales and Customer Services staff would need to learn how to use the new products in order to advise customers. Information about product life cycles can be found at this address: This weblink was working correctly at the time of publication. Boardworks takes no responsibility for the content of external sites. How does the Research and Development function affect the other departments?

13 Case study: Thorpe Park
In March 2006, after 11 months of building, Thorpe Park opened the ride Stealth. It is Europe’s fastest and tallest launch coaster, but at £12 million, it was a very expensive project to undertake. The R&D department designed Stealth, but the Marketing department were also involved in considering: cost price to charge customers practicality: where, when, how profit. Teacher’s note: Information about the Stealth ride can be can be found at this address: This weblink was working correctly at the time of publication. Boardworks takes no responsibility for the content of external sites. Photo: © Merlin Entertainments Group

14 Independence of functional areas
Departmental links are essential in order to meet the aims and objectives of the business. This is known as interdependence, as departments depend on each other. In a small business, links between different functional areas are often informal and regular. In larger businesses, people may work in separate areas and rarely meet each other but they still need information and support from each other in order for the business to run efficiently. Photo: © Konstantin Chagin, shutterstock.com 14

15 Interdependence situations
To highlight the interdependence of different functional areas, think about these scenarios. Explain the likely effect on the achievement of targets if the following situations occurred at Cadbury’s: Marketing do not advise their Production department that they have launched a £1 million advertising campaign for Giant Buttons. Finance do not tell Production that there is a 5% budget cut. Customer Services do not inform Research and Development that there have been a record number of complaints about a recently launched chocolate bar. Finance do not advise IT Support that they have purchased new financial management software. Teacher’s note: If Marketing do not advise Production of their advertising campaign, the increased sales that Marketing will hope to make as a result might mean that Production are not producing enough Giant Buttons to keep up with demand. If Finance do not tell Production about the reduction in budget, then Production will continue to work to their original figure and then find that they have spent over their budget. If Customer Services do not inform Research and Development about the number of complaints they have had, Research and Development will not have any knowledge of how successful the product has been. If they do not know, they cannot try to rectify the situation and may make similar mistakes in the future. If Finance do not advise IT Support that they have purchased new software, IT Support may not be able to help Finance if they have any problems using the software. As an extension activity, you may wish to ask students to identify three issues on which different functional areas would have to communicate and explain which departments would be involved. 15


Download ppt "What different functional areas exist within businesses?"

Similar presentations


Ads by Google