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LO2- how the functional areas of business work together to support…
LO2- how the functional areas of business work together to support activities of the business.
2.1 Key tasks of functional areas of businesses
Finance
accounting, control the finance of the business, their jobs include:
Making and receiving payments (recording transactions)
Preparing annual financial accounts ie statement of financial position + income statement.
Monitoring and analyzing financial performance ie cash flow forecasting
paying employees
Marketing
Responsible for understanding the needs and wants of customers
Work with research and development function to satisfy needs.
Decide on appropriate distribution channels ie online/ stores
Decide on appropriate pricing strategy
Develop and deliver promotional campaigns, to generate sales and create awareness.
Obtain customer feedback
Sales
responsible for communicating with customers, representing the business in direct contact with customers and providing good customer service and knowledge on products
talk and inform customers and potential customers on products/ services
work towards achieving sales targets
deal with customers face to face or over phone or email
Human Resources
responsible for all aspects of managing the people who work in a business
recruit new employees
Identify training needs and organize training
plan recruitment needs, consider business objectives and the impacts these have on number of staff needed
ensure appropriate pay and benefit systems are in place
oversee redundancy procedures
Ensure human resource legislation is met and establish company policies ie disciplinary and grievance procedures.
Ensure administration is up to date ie addresses
Operations management
Responsible for transforming raw materials (inputs) into finished goods (outputs)
Can use labor or technology/ machines.
Ensure quality standards are met
Control use of inputs to produce efficiently
Organize method of production
Customer Service
responsible for liaising with customers every day. many businesses use helplines via telephone, online msging and online chats
staff should be knowledgeable, helpful and calm to deal with customer queries and complaints
they need to relsove problems quickly and realistically
Business support Services
Aka IT or Administration. They are responsible for day to day running of the business and support staff
Produce contracts
maintain equipment ie photocopiers, arranging maintenance for them
arrange meetings
organize travel plans
provide technical IT support
Research and development
Skilled employees responsible for developing new products and services in response to market findings.
To ensure the success of the business against its competitors, being one better
develop new products that customers want and need
to remain profitable and competitive
carry out customer feedback and look for gaps in the market
Purchasing/ procurement
source and provide raw materials, goods and services needed on a day to day basis.
ie Cadburys needs sugar and packaging, Bibby distribution needs vehicles and IT.
most businesses need stationary and services including water and electricity
purchasing function source resources at lowest cost at acceptable quality.
Public sector procurement- governed by regulations to ensure best value is obtained from supplier and purchasing is transparent and fair.
2.2 How business functions interrelate with other business functions
Marketing interrelates with
Finance: having an adequate budget to run marketing programs.
selling at the right price so information is needed on finance.
Operations: info needed on production (costs) to ensure they are covered.
quality is important to ensure it is marketed for.
maintain customer loyalty by ensuring products meet specifications and are not defective
Human resources: ensure competent people are implementing marketing strategies and programs.
recruit new staff that may be needed.
Finance interrelates with
Human resources: to have staff adequate for accounting, finance and related skills.
business support services: ensure budget allocation is according to plans ie training and development budget.
monitor budget use in each department.
Operations management: determine financing strategy when operations decides to launch investment project or purchase capital goods.
Human resources interrelates with
Operations management: ensure resources are available, not too many to increase costs or too few to disrupt operations.
Business support: organize training and development to become professionals in functional areas.
purchasing/ procurement: ensure materials purchased are correct and standardized and that the team work on staying within labor regulations and other regulations
Operations interrelates with
Sales: they forecast and prepare production schedules, to determine how much output to produce.
research and development: new products to be produced and specified with appropriate methods and quality control.
Finance: budget for everyday running operations and the buying of new machines.
Business support services: ensure machinery is up to date and available
Poor interrelationships between business functions may effect the service provided to customers.
Ie If sales function doesn't inform operations management on a large order so production doesn't increase, there may not be sufficient products available for delivery
Business reputation can be ruined and they may lose customers.