Presentation on theme: "Functional areas within business"— Presentation transcript:
1 Functional areas within business This presentation contains an overview of the functional areas in business.Note for Students:If you wish to print out these slides, with notes, it is recommended that, for greater clarity you select the ‘pure black and white’ option on the PowerPoint print dialogue box.
2 Key functions in business ICT ServicesSalesDistributionAdministrationThe main functional areasMarketingAccounts/FinanceThis slide lists all the functional areas we need to think about. It is worth pointing out to at this stage that all businesses vary – many will not have all these different functions, others may have even more, some may have additional areas, such as design. However, this is a useful model to start with, as it covers the main areas which must be done by someone (or a group of people).Human resourcesResearch and developmentDesignProduction
3 Delivering key functions In a small business, will be done by individualsIn a medium/large business, will be done by individuals working in functional areas or departmentsA small business may have only 4 or 5 people, but these may include someone who is responsible for finance, an administrator and sales staff. Some people may have dual roles (eg finance and human resources). The situation is different in a larger businesses where groups of people work in functional areas. These may be called departments – but not always!
4 Links between functions DistributionHRR & DAll functional areas must link together to achieve the overall aims and objectivesEach functional area collects and stores information using ICTThis information needs to be shared within thecompanyThis means cooperation and good communications, which obviously ICT plays a major part!!SalesAdminMarketingDesignICTProductionThe critical point is that functional areas must work and link together for the business to be successful. For instance, sales cannot promise to deliver goods which production cannot make on time.Finance
5 Human resourcesRecruitment, retention and dismissalHealth and safetyWorking conditionsThe main responsibilities of the human resources functionEmployee organisations and unionsTraining, development and promotionIn a large organisation Human Resources would be the first point of contact for all job applicants. Working conditions relate to the facilities available, hours of work, pay rates. Continual training and development is a key feature of many organisations but is often more structured in larger organisations – where there is also more scope for promotion. Not all firms have employee organisations or unions – and the former can be known by different names, eg staff association or works council. Fundamentally, however, it is an employee group which represents employee interests if there is no union. Health and safety may be part of HR but could be under the remit of a separate Health and Safety Officer who may – or may not – be working in the HR department. Legal rights and responsibilities are a key part of HR work..Includes the legal rights and responsibilities of employer and employees
6 What information does the Human Resources Function need?
7 Marketing and Sales Activities include: Both are concerned with customer needs.Market researchActivities include:Small companies may not have a marketing function as such, but contract this out to a specialist company who will undertake market research and advertising for them. However, all companies will be interested in promoting sales, though methods will differ depending upon whether they serve industrial or private customers. The actual sales force can vary from highly qualified technical specialists (e.g. in the aerospace and pharmaceutical industries and for industrial plant and equipment) to store staff working in retail outlets such as Next and Boots.SalesPromotion
8 What information does the Marketing Function need?
9 Finance Concerned with money and future plans Preparing accounts, eg invoices, management accounts, financial accounts for shareholders and Inland RevenuePreparing wages and salariesObtaining capital and resources, eg money for expansion or to pay for resources such as equipment and materials.Finance is critical because if the company fails to make a profit it will not survive. Finance is concerned with current money received/to be paid out and how to finance future plans (eg for expansion). There is a difference between management accounts (which give managers continuous information on financial affairs) and financial accounts which are a legal requirement at the end of each financial year. (NB The financial year can be selected by the company and does not have to accord with the tax year).It is important that a company regularly issues invoices and chases up poor payers to make sure that the cash flowing into the company is sufficient to pay the company bills (ie cash flow).
10 What information does the Finance Function need?
11 Research and development Concerned with developing new goods/services and updating old onesActivities include:Technological developmentsScientific researchDesign featuresPerformance of productResearch and development usually relies on marketing to obtain information on customer needs. However, it needs to develop products which can be made by operations and (usually) sold at a competitive price. Exceptions here could include Porsche or Gucci! The aerospace and drugs industries are the two highest spenders on R & D – aks yourself why. Remember that within this area there is a difference between design and performance (obvious examples are cars, televisions, computers and even jug kettles).
12 What information does the Research Function need?
13 Production (sometimes called operations) Concerned with the main business activitiesObtains and converts resources of the business into goods/services, ieBuildings and landEquipmentPeopleMaterialsOperations is easy to explain in a manufacturing industry, e.g. Ford’s operation is producing cars. For this is needs a factory, assembly equipment, assembly workers and car parts. Operations can be more difficult to understand in a service organisation. However, useful examples are airports, hospitals, hotels and supermarkets.Quality Control is key if business reputations are to be developed. Today QC is mainly ‘in-built’ into all stages of production, to ensure the customer is satisfied, recommend the business to others and repeat business follows.
14 What information does the Production Function need?
15 Customer service Concerned with customer relationships Activities include:Providing informationGiving adviceProviding credit facilitiesDelivering goodsProviding after-sales serviceThe range of customer service facilities will vary depending upon the type of business activity and size of organisation. You may be familiar with customer service desks in large stores and possibly in banks or building societies. Customer service ‘on-line’ is becoming more common, especially for firms which sell on-line (Dell computers is a good example). The importance of customer service to the customer who has a difficult query, a problem with a purchase or is buying something very expensive or difficult to transport should be regarded as a key component of a successful business.
16 What information does the Customer Service Function need?
17 Administration The role of administration and ICT function Clerical work, eg mail, record keepingCleaning and maintenanceHealth and safety recordsThe role of administration and ICT functionSecurityThis function is often decentralised in that admin staff work in all departments, cleaning and security may be sub-contracted, maintenance may be in a separate ‘Estates’ department in large organisations (such as a hospital) and IT support may be a separate department! Health and safety may cause confusion as this is also listed in HR. Fundamentally, legal responsibility lies with the senior managers and all employees have a legal responsibility under the Health and Safety at Work Act. However, administrators may be responsible for routine paperwork such as accident reports, risk assessments etc for their own areas.It is important to realise that clerical or administrative work is not just routine or tedious. It is a key career path for many staff in an organisation, given the wide range of admin jobs and pay scales today. Many senior administrators undertake highly responsible jobs and their work is rarely low level or boring!
18 What information does the Administration Function need?
19 The use of IT Relates to all functional areas: Support for software applications, electronic communications and electronic transactionsRelates to all functional areas:Electronic communications (eg )Data sharing or EDI (eg databases)Security systems (eg virus protection)External communications (eg Internet)Online support for customers (eg order tracking)Electronic transactions (eg EFT (linked to EDI))Even a small business will have some IT facilities, although the range may be more limited.NB that electronic transactions relates to electronic cash registers and direct debits as well as payments over the Internet.
20 What information does the ICT Services Function need?
21 Functional variations No two businesses are the same!Functions will vary because of:Size and scale of businessActivities of businessType(s) of customersNeeds of customersPreferences of owner(s)Remember every company is different!!. A large business which operates on an international basis may even be structured into different divisions, based on geographical location. A business which deals purely with industrial customers is likely to be different to one which deals with the public. A retail store is organised differently to a town hall or hospital or school/college. Above all, the owner may wish to structure the company to suit his or her own preferences. Providing all the key activities are undertaken and there is cooperation and interaction between these areas, this is not a problem.
22 Investigating functional areas Identify key functionsFind out where these carried out (or by whom)Check names of key areas/departmentsIdentify what information is collected and howIdentify links between functions/areasIdentify use of IT within/between functions and customers to access stored information or exchange informationNote any problem areasWhen you read the Case Study, you will need to consider each of the above bullet points separately.
25 Learning objectivesWhy must the functional areas within a business work together?How does ICT help the different functional areas perform their tasks efficiently?How does ICT help businesses save money?Why is ICT vital for security and safety?25 of 25