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 tutors: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 Draw diagramKey functions in businessCustomer servicesOperationsAdministration and IT supportThe main functional areasMarketing and salesFinanceIt is worth pointing out to students 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).Research and developmentHuman resources
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 departmentsStudents needs to understand that a 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. Again, students may find it useful to note here that these may be called departments – but not always!
4 Links between functions Write down bullet pointsLinks between functionsHRR & DAll functional areas must link together to achieve the overall aims and objectivesThis means cooperation and good communicationsOpsAdminITSalesThe 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 operations cannot make on time.CSMarketingFinance
5 Draw diagramHuman ResourcesRecruitment, retention and dismissalHealth and safetyWorking conditionsThe main responsibilities of the human resources functionEmployee organisations and unionsHuman resources in a large organisation this 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.Training, development and promotionIncludes the legal rights and responsibilities of employer and employees
6 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). It is useful to point out here the 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 also worth pointing out the importance of regularly issuing invoices and chasing up poor payers to make sure that the cash flowing into the company is sufficient to pay the company bills (ie cash flow).
7 Write down bullet points Finance DepartmentFinancial AccountingRecording all transactionsKeeping all financial recordsPreparing financial reportsCosts and BudgetsWork out all costs of products/servicesAnalysing past costsSetting targets and department budgetsComparing budgets to actual figuresManaging FinanceWhat resources are neededRaising additional capital for new resourcesWrite down bullet pointsPayrollRecording employee hours workedCalculating pay and deductions
8 Operations Concerned with the main business activities Obtains and converts resources of the business into goods/services, e.g.Buildings 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. Students should be able to suggest the types of buildings, equipment, people and materials required in each case.Tutors may wish to include the concepts of Purchasing under Operations (which may be a separate department in a large organisation) – as well as Quality Control. Today QC is mainly ‘in-built’ into all stages of operations
9 Operations Raw Materials Production Process Finished Product Copy slideOperationsRaw MaterialsProduction ProcessFinished ProductTypes of production:Job – one off item, i.e. a paintingBatch – make a load of one item i.e. breadContinuous flow – made along a production lineQuality ControlQuality control/inspectionQuality assurance
10 Copy slideMarketing and SalesFor the customers to buy a good or service it must be:The right productIn the right placeAt the right timeAt the right priceMarketing mix:ProductPricePromotionPlaceTwo types of market research:Primary research (Field)Secondary Research (Desk)Products need to be promoted in order to gain sales, this can be through:Point of saleAdvertisementsSponsorshipCompetitions
11 Customer service Concerned with customer relationships Copy Bullet PointsCustomer serviceConcerned with customer relationshipsActivities include:Providing information/advice onproduct/service rangesGiving adviceProduct SafetyProviding credit facilitiesDelivering goodsProviding after-sales service – guarantees, help linesThe range of customer service facilities will vary depending upon the type of business activity and size of organisation. Most students will 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 appreciated by all students.
12 Research and Development Copy Bullet PointsResearch and DevelopmentConcerned 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 – students could perhaps suggest why. It is also useful for students to understand the difference between design and performance (obvious examples are cars, televisions, computers and even jug kettles).
13 Research and Development R&D is about improving the products a firm makes or the way it makes themIn some industries R&D is the main source of future business growth and have dedicated R&D staffBut R&D is an expensive activity, so firms often rely on using the ideas of othersExamples are:Car manufacturers (investing large sums of capital in developing new vehicle models)Pharmaceutical companies (reliant on new drug products for future growth)
14 Administration and IT support Copy DiagramClerical work, e.g. mail, record keepingCleaning and maintenanceHealth and safetyThe 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.Finally, it is helpful if students do not gain the impression that all clerical or administrative work is routine and tedious, given the wide range of admin jobs and pay scales today. Many senior administrators undertake highly responsible jobs and it is unhelpful if students who may work with such staff or talk to them as part of their investigations have the idea that their work is low level or boring!Support for software applications, electronic communications and electronic transactions
15 The use of IT Relates to all functional areas: Copy Bullet PointThe use of ITRelates to all functional areas:Electronic communications (eg )Data sharing (eg databases)Security systems (eg virus protection)External communications (eg Internet)Online support for customers (eg order tracking)Electronic transactions (eg EFT)Even a small business will have some IT facilities, although the range may be more limited. Note that electronic transactions relates to electronic cash registers and direct debits as well as payments over the Internet. Students could usefully suggest the types of software applications used in business and other relevant examples under each heading.
16 ICT Support In house support to all departments Setting up departmental systemsWebsite updates
17 Clerical, filing and keeping records Photocopying Secretarial services Copy Bullet PointsAdministrationClerical, filing and keeping recordsPhotocopyingSecretarial servicesReception/telephoneIncoming and outgoing mail
18 AdministrationAdministration is about supporting and organising the work of an organisationIt is not the central purpose of the businessBut every business organisation must have someone to carry out these tasks the administrative staff are vitalOtherwise there would be chaos!They have a close understanding of the business across all of its functional areasThey need to know who does what in the firm
19 Is Administration Important? The administrative function is an indirect part of a businessIt is also crucial to what a business doesExamples of administrative tasks are:dealing with enquiriesgiving messagesproducing documents
20 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)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.
21 Investigating Functional Areas for BTEC. Identify key functionsFind out where these carried out (or by whom)Check names of key areas/departmentsIdentify links between functions/areasIdentify use of IT within/between functions and customersNote any problem areas