Functional Areas Within the Business

There are many tasks every business needs to do if it is going to succeed. Each of these tasks is described as being a function of a business. The following is a brief introduction to each of these functions:

• human resources - ensures the business has the best staff for the job and that they are able to work effectively in a safe environment;
• finance - will keep a record of all money coming in and going out of the business. They have responsibility for securing finances for future expansion and paying staff and suppliers;
• administration and ICT support - ensure the smooth running of the business on a day-to-day basis. They have responsibility for clerical duties, cleaning, computer and software support, security and health and safety;
• operations - have the task of producing the goods or service in the most efficient way. This is done by making best use of the business’s staff, machinery, building and raw materials;
• marketing and sales - will try and maximize the level of sales by carrying out market research and promoting the goods or service through a motivated sales team;
• customer service - will help the customer before and after a sale has been made by providing information, giving advice, providing credit facilities, delivering goods and providing after-sales support;
• research and development - will help the business remain competitive by developing new goods and services and updating the existing ones;
• Use of ICT - ICT will be used in each of these functional areas and it should assist the business in achieving its aims and objectives.

A sole trader who works on his own will be responsible for all of these functional areas. The diagram below shows how a one-person business has to control all of the functional areas.

This compares to a large business (which could still be a sole trader) where each functional area may have its own department with a specialised manager. Larger businesses thus have an advantage over smaller ones as they can employ specialist managers whereas the owner of a one-person business has to be a “jack of all trades”.

The diagram below shows how a large business is able to have separate departments each with a specialized manager.

A very large business may even identify divisions within functional areas, for example the human resources area may be divided into recruitment, training and health and safety.

It is important that the different functional areas of the business work well together. This is because many aspects of a business’s activity will involve different functional areas.