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Functional Areas within Business

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Key functions in business

Operations

Finance

Research and development

Human resources

Marketing and sales

Administration and IT support

Customer services

The main functional

areas

Draw diagram

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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

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Links between functions

All functional areas must link together to achieve the overall aims and objectives

This means cooperation and good communications

Sales

Finance

Marketing

AdminIT

CS

Ops

R & DHR

Write down bullet points

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Human Resources

Includes the legal rights and responsibilities of employer and employees

Health and safety

Employee organisations

and unions

Training, development

and promotion

Working conditions

Recruitment, retention and dismissal

The main responsibilities of the

human resources function

Draw diagram

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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.

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Finance DepartmentFinancial 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

Payroll•Recording employee hours worked•Calculating pay and deductions

Write down bullet points

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Operations

Concerned with the main business activitiesObtains and converts resources of the

business into goods/services, e.g.– Buildings and land– Equipment– People– Materials

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Operations

Raw Materials

Production ProcessFinished 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

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Marketing and Sales

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

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

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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

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Research and Development

Activities include:

Technological developments

Scientific researchDesign featuresPerformance of product

Concerned with developing new goods/services and updating old ones

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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)

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Administration and IT support

Cleaning and maintenance

Support for software applications, electronic communications and

electronic transactions

Security

Health and safety

Clerical work, e.g. mail, record keeping

The role of administration and

ICT function

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The use of IT

Relates to all functional areas:

Electronic communications (eg email)Data sharing (eg databases)Security systems (eg virus protection)External communications (eg Internet)Online support for customers (eg order tracking)Electronic transactions (eg EFT)

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ICT Support

In house support to all departments

Website updates

Setting up departmental systems

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Administration

•Clerical, filing and keeping records•Photocopying

•Secretarial services•Reception/telephone

•Incoming and outgoing mail

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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

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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

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Functional Variations

No two businesses are the same!

Functions will vary because of:Size and scale of businessActivities of businessType(s) of customersNeeds of customersPreferences of owner(s)

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Investigating Functional Areas for BTEC.

Identify key functionsFind 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 customersNote any problem areas