Functional Areas of a Business Flashcards
What are the 6 MAIN functional areas of a business?
Production
Marketing
Human Resources
Research and Development
Finance (and accounts)
Information Technology
Name 3 Key Functional Activities of the PRODUCTION Department
- Making the product
- Maintaining factory equipment
- The transformation of raw materials into finished products
- Warehousing finished goods
- Controlling the production process
Name 3 Key Functional Activities of the MARKETING Department
- Developing sales and promotion strategies for the product.
- Conducting market research (get customers’ tastes and preferences)
- Designing the company’s product
Name 3 Key Functional Activities of the FINANCE Department
- Produce all the financial reports for the business
- Establish hire purchases and credit control measures
- Budgeting for the company and disbursement/giving out of financial resources to the other departments.
Name 3 Key Functional Activities of the HUMAN RESOURCES/PERSONNEL Department
- Terminations: firing people
- Occupational safety & health: proper railings, fire extinguisher up-to-date, etc.
- Recruitment and selection (of employees)
Name 3 Key Functional Activities of the RESEARCH & DEVELOPMENT DEPARTMENT
- Developing new products.
- Conducting feasibility studies for a new product or business idea.
- Conducting varied types of research on behalf of the company such as product research, technology research, etc.
Name 3 Key Functional Activities of the INFORMATION TECHNOLOGY Department
- Developing and maintaining I.T systems to suit the nature of the business and the needs of the business.
- Ensuring the security of corporate information and assets.
What is a stakeholder?
An individual or group with a vested/direct interest in the operations and performance of a business.
What are BUSINESS stakeholders?
Business Stakeholders activities’ if any business can have a great impact on many people and groups
What is the difference between stakeholders and shareholders?
Stakeholders have a vested interest in the business, and shareholders buy shares to earn money.
What are the two classifications of Stakeholders of a Business?
- Internal Stakeholders
- External Stakeholders
What is an Internal Stakeholder?
Individuals within an organization who have a special interest in its activities and how well the business performs.
What is an External Stakeholders?
Individuals who aren’t employed by or members of the business, but rather they have a vested interest in its activities and its financial performance.
What are 4 examples of internal stakeholders?
- Owners/Shareholders
- Managers
- Employees
- Board of Directors
What are 4 examples of external stakeholders?
- Suppliers
- Consumers
- Lending institutions
- Community
- Competitors
- Government
What do owners/shareholders do? (INTERNAL)
- Provide capital to allow the business to expand
- Expected to attend general meeting to receive annual reports and elect directors
- ensure the managers are fulfilling the objectives of the business and are using resources efficiently
What does the Board of Directors do? (INTERNAL)
- Develop strategies for the company to reach the agreed company goals for sales, profits, and company value.
- To decide how business profit and capital contributions by the owner should be invested to achieve the most profit.
- To ensure that the activities of the business and its financial statements are in accordance with the government regulations.
What do the managers do? (INTERNAL)
- To maximize profit or make maximized returns on investments made by the owners into the business.
- Ensure the employees are productive and also treated fairly
- Ensure that the goals of the owner and the Board of Directors are achieved in growing the business
What do the employees do? (INTERNAL)
- they provide manual and other labour services to the company to produce goods and services for the customers/to allow goods and services to be provided for the customers.
- meet the conditions and requirements of the employment contract.
- to cooperate with management in all reasonable requests.
What do suppliers do? (EXTERNAL)
- to supply goods and services ordered by the business in the time and condition as laid out by the purchase contract or the suppliers’ service agreements.
What do consumers do?
- They purchase goods and services from businesses to provide revenue (from sales which allows the business to function) to make profit and expand the business
- To provide feedback to the business on the performance of the product.
- Expected to be honest and not make any false claims about poor service or faulty goods.
What do lending institutions do?
- Ensure businesses can repay loans
- Provide financial assistance to businesses in the form of loans or financial advice
What does the community do?
- cooperate with the business when reasonable to do so on expansion and other plans
- meet reasonable requests from business for local services
- Ensure that the business within the community operates within the law and contributes towards the development of the community
What do competitions do?
- stimulate competition for sales and market shares
