3 - Functional Areas In A Business

Question 0

What is the role of the finance department

Answer 0

• keep track of credit sales which is when customers are allowed to receive goods and make payments later. So they make sure they are paying for their goods/service.
• money will also be going out of the business to pay for purchases made. The finance are must make sure that the business pays the creditors (suppliers) as otherwise that might get a poor reputation.
• finally they have to prepare a final year-end account. This includes the profit and loss account . These statements take into account total sales less the total expenditure

Question 1

What are the 5 main functional areas in a business

Answer 1

1. Finance
2. Human resources
3. marketing
4. Operations
5. Administration/ICT

Question 2

What is the role of the human resourced department

Answer 2

• they are responsible for calculating number of staff required in order to facilitate and keep the business running smoothly.
• they are in charge of recruiting and selecting candidates to fill vacancies. Also will offer training to new or existing employees.
• are in charge of making sure employees work safely ( health & safety)
• put in place schemes to motivate workers

Question 3

What is the role of the marketing department

Answer 3

• are in charge of decisions concerning what products consumers want and how they are promoted
• decide price of product
• in charge of promotion for the product (promotion method usually decided by who target market is)

Question 4

What is the role of the operations department

Answer 4

• this department includes the production of the product
• normally takes place in a factory (automated production lines) or in small workshops where work is done by hand
• they plan the number of products to be made
• in charge of sourcing for the raw material and quality control of products

Question 5

What is the role of the administration/ICT department

Answer 5

• described as the backbone of the business
• reception would come under admin, important role as is usually the first contact point someone has in the business
• security is also a role in this functional area
• ICT support staff ensuring that the computer network throughout the business is always working correctly

Question 6

What are the consequences if functional areas do not operate efficiently between the HR department wanting to train employees and the operations department do not.

Answer 6

E.g if HR department wants to increase amount of job training for all production line employees, this could conflict with the operations department as they need their employees to increase production, so need their employees

However in the long term the training would make the employees more efficient, which in term would increase productivity

Question 7

What are the consequences if functional areas do not operate efficiently between finance not wanting to spend a lot and marketing wanting to spend

Answer 7

If the marketing wanted to spend a large amount of money on a product or promotion, but the finance department declines them from doing this as they are trying to reduce costs, this would cause conflict within the business.

Question 8

What are the consequences if functional areas do not operate efficiently between finance department wanting to spend a lot on something and shareholders

Answer 8

If the finance department what to spend out a lot of money on something. The shareholders may drop out as they know they will not get a large dividend as the business will not be making as much profit.