Functional Areas and their Roles in Business
- Departments are functional areas within a business, and usually every employee is assigned to a specific department
- A functional area is a group of workers with similar skills and expertise who carries out a specific organisational role
- Businesses often split their work in this way to improve efficiency with specialists capable of working at a high standard on their allocated tasks
- These business functions are sometimes outsourced to specialist service providers
- This can reduce costs and ensure access to advice from specialists who may be expensive to employ directly
Diagram: Functional Areas
The four main functional areas carry out key specialist tasks in a business
The Roles of the four main Functional Areas
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- Functional areas need to work together effectively to achieve business aims and objectives
Examples of Functional Areas Working Together
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Finance sets budgets so that the marketing function knows how much they have to spend on promotional activity |
Human resources recruits staff to work within the finance function and organises induction training for new staff so they may settle swiftly into their roles |
Marketing carries out research to find out the needs of customers, which informs the production function that makes the products to meet requirements |
Production reports output and wastage data to the finance function, which calculates costs of manufacture and determines profit margins |
Exam Tip
You do not have to have a detailed knowledge of each of the functional areas - but you should understand the broad purpose and key roles of those covered in the notes above. Examiners have commented on few candidates understanding of the Human Resources function in particular!
