Resources | Subject Notes | Business Studies
This section explores the main functional areas within a business and how they are typically organised in simple structures. Understanding these areas is crucial for comprehending how businesses operate and achieve their objectives.
A business is typically divided into several key functional areas, each responsible for specific activities. These areas work together to ensure the overall success of the organisation.
The operations department is responsible for the production of goods or the provision of services. This includes:
Example activities: Manufacturing, assembly, service delivery, logistics.
The marketing department focuses on understanding customer needs and promoting the business's products or services. Key activities include:
Example activities: Conducting surveys, designing packaging, running advertising campaigns, managing online presence.
The finance department manages the business's money. Responsibilities include:
Example activities: Preparing financial statements, managing payroll, securing loans, analysing profitability.
The HR department deals with the employees of the business. This includes:
Example activities: Writing job descriptions, conducting interviews, organising training sessions, managing employee contracts.
The R&D department is responsible for creating new products or improving existing ones. This involves:
Example activities: Scientific experiments, market testing new ideas, designing new features.
In smaller businesses, the functional areas are often grouped together in a relatively simple structure. This can take various forms, such as a functional structure or a hierarchical structure.
This is the most common simple structure. It groups employees based on their specialist skills and functions. For example, all marketing staff work together, all finance staff work together, etc.
| Department | Responsibility |
|---|---|
| Operations | Production of goods/services |
| Marketing | Promoting and selling products/services |
| Finance | Managing the business's finances |
| Human Resources | Managing employees |
This structure involves a chain of command, with authority flowing from the top down. It's often seen in larger organisations where there are multiple employees within each functional area.
A typical hierarchical structure might look like this:
While simple, these structures can become less efficient as a business grows and becomes more complex. This often leads to the adoption of more complex organisational structures.