Functional Areas Of Business

Functional Areas Of Business- Lecture Notes The activities needed to operate a business can be divided into a number of functional areas. • Examples include: human resources, operations, marketing, accounting,finance and information technology. Let’s briefly explore each of these areas. HUMAN RESOURCES 1. HR managers are responsible for ensuring that the organization has all of the skills and capabilities necessary to run the business. 2. HR managers develop staffing plans, recruit and select new employees, monitor the performance management process, and develop succession plans for advancement and replacement. 3. They develop standards for compensation and benefits and assist managers with staff issues. OPERATIONS All companies must convert resources (labor, materials, money, information, and so forth) into goods or services. • Some companies, such as Apple, convert resources into tangible products— Macs, iPhones, etc. • Others, such as hospitals, convert resources into intangible products — e.g., health care. The person who designs and oversees the transformation of resources into goods or services is called an operations manager. • This individual is also responsible for ensuring that products are of high quality. • In many organizations, operations management includes managing the supply chain which controls the delivery of raw materials and the distribution of finished goods. MARKETING • Marketing consists of everything that a company does to identify customers’ needs (i.e. market research) and design products to meet those needs. • Marketers develop the benefits and features of products, including price and quality. • They also decide on the best method of delivering products and the best means of promoting them to attract and keep customers. • They manage relationships with customers and make them aware of the organization’s desire and ability to satisfy their needs. ACCOUNTING • Managers need accurate, relevant and timely financial information, which is provided by accountants. Accountants measure, summarize, and communicate financial and managerial information and advise other managers on financial matters. i. There are two fields of accounting: Financial accountants prepare financial statements to help users, both inside and outside the organization, assess the financial strength of the company. ii. Managerial accountants prepare information, such as reports on the cost of materials used in the production process, for internal use only. FINANCE - Finance involves planning for, obtaining, and managing a company’s funds. Financial managers address such questions as the following: 1. How much money does the company need? 2. How and where will it get the necessary money? 3. How and when will it pay the money back? 4. What investments should be made in plant and equipment? 5. How much should be spent on research and development? - Good financial management is particularly important when a company is first formed because new business owners usually need to borrow money to get started.