IDENTIFYING THE MAJOR FUNCTIONAL AREAS IN A BUSINESS

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1) RESEARCH AND DEVELOPMENT. Functional area responsible for conceiving and designing new products. Products are conceived and designed through research and development (R&D), sometimes known as product design or engineering. As Example, many companies simply resell products that other firms make. However, for companies that do develop products, R&D is essential to their survival because it provides the ideas and designs that allow these firms to meet customer needs in competitive markets..

2) MANUFACTURING, PRODUCTION AND OPERATIONS. Variously called manufacturing, production, or operations, this function concerns whatever the company makes (for goods-producing businesses) or does (for service businesses). In addition to supervising the actual production activity, operations managers are responsible for a wide range of other strategies and decisions, including purchasing (arranging to buy the necessary materials for manufacturing), logistics (coordinating the incoming flow of materials and the outgoing flow of finished products), and facilities management (everything from planning new buildings to maintaining them)..

3) MARKETING, SALES, DISTRIBUTION, AND CUSTOMER SUPPORT.

4) FINANCE AND ACCOUNTING. The finance and accounting functions ensure that the company has the funds it needs to operate, monitor, and control how those funds are spent and draft reports for company management and outside audiences such as investors and government regulators. Accounting specialists work closely with other functional areas to ensure profitable decision making. For instance, accountants coordinate with the R&D and production departments to estimate the manufacturing costs of a new product and then work with the marketing department to set the product’s price at a level that allows the company to be competitive while meeting its financial goals..

5) HUMAN RESOURCES. The human resources (HR) function is responsible for recruiting, hiring, developing, and supporting employees. Like finance and accounting, HR supports all the other functional areas in the enterprise. Although managers in other areas are usually closely involved with hiring and training the employees in their respective departments, HR generally oversees these processes and supports the other departments as needed. The HR department is also charged with making sure the company is in compliance with the many laws concerning employee rights and workplace safety..

6) BUSINESS SERVICES. In addition to these core functions, a wide variety of business services exist to help companies with specific needs in law, banking, real estate, and other areas. These services can be performed by in-house staff, external firms, or a combination of the two For example, a company might have a small permanent legal staff to handle routine business matters such as writing contracts but then engage a specialist law firm to help with a patent application or a major lawsuit. Similarly, all but the smallest companies have accounting professionals on staff to handle routine matters, but companies that sell shares of stock to the public are required to have their financial records audited (reviewed) by an outside accounting firm..

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