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 diagram
Key functions in business
Customer services
Operations
Administration and IT support
The main functional areas
Marketing and sales
Finance
It 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 development
Human resources

3. Delivering key functions
In a small business, will be done by individuals
In a medium/large business, will be done by individuals working in functional areas or departments
Students 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 points
Links between functions HR
R & D
All functional areas must link together to achieve the overall aims and objectives
This means cooperation and good communications
Ops
Admin IT
Sales
The 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. CS
Marketing
Finance

5. Draw diagram
Human Resources
Recruitment, retention and dismissal
Health and safety
Working conditions
The main responsibilities of the human resources function
Employee organisations and unions
Human 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 promotion
Includes 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 Revenue
Preparing wages and salaries
Obtaining 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 Department
Financial Accounting
Recording all transactions
Keeping all financial records
Preparing financial reports
Costs and Budgets
Work out all costs of products/services
Analysing past costs
Setting targets and department budgets
Comparing budgets to actual figures
Managing Finance
What resources are needed
Raising additional capital for new resources
Write down bullet points
Payroll
Recording employee hours worked
Calculating 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 land
Equipment
People
Materials
Operations 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 slide
Operations
Raw Materials
Production Process
Finished Product
Types of production:
Job – one off item, i.e. a painting
Batch – make a load of one item i.e. bread
Continuous flow – made along a production line
Quality Control
Quality control/inspection
Quality assurance

10. Copy slide
Marketing and Sales
For the customers to buy a good or service it must be:
The right product
In the right place
At the right time
At the right price
Marketing mix:
Product
Price
Promotion
Place
Two 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 sale
Advertisements
Sponsorship
Competitions

11. Customer service Concerned with customer relationships
Copy Bullet Points
Customer service
Concerned with customer relationships
Activities include:
Providing information/advice on
product/service ranges
Giving advice
Product Safety
Providing credit facilities
Delivering goods
Providing after-sales service – guarantees, help lines
The 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 Points
Research and Development
Concerned with developing new goods/services and updating old ones
Activities include:
Technological developments
Scientific research
Design features
Performance of product
Research 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 them
In some industries R&D is the main source of future business growth and have dedicated R&D staff
But R&D is an expensive activity, so firms often rely on using the ideas of others
Examples 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 Diagram
Clerical work, e.g. mail, record keeping
Cleaning and maintenance
Health and safety
The role of administration and ICT function
Security
This 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 Point
The use of IT
Relates 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 systems
Website updates

17. Clerical, filing and keeping records Photocopying Secretarial services
Copy Bullet Points
Administration
Clerical, filing and keeping records
Photocopying
Secretarial services
Reception/telephone
Incoming and outgoing mail

18. Administration
Administration is about supporting and organising the work of an organisation
It is not the central purpose of the business
But every business organisation must have someone to carry out these tasks the administrative staff are vital
Otherwise there would be chaos!
They have a close understanding of the business across all of its functional areas
They need to know who does what in the firm

19. Is Administration Important?
The administrative function is an indirect part of a business
It is also crucial to what a business does
Examples of administrative tasks are:
dealing with enquiries
giving messages
producing documents

20. Functional Variations
No two businesses are the same!
Functions will vary because of:
Size and scale of business
Activities of business
Type(s) of customers
Needs of customers
Preferences 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 functions
Find out where these carried out (or by whom)
Check names of key areas/departments
Identify links between functions/areas
Identify use of IT within/between functions and customers
Note any problem areas