Departmental Function 

Businesses often split their work into different departments or functional areas. Each of these functional areas will have specific tasks to complete. The main functional areas are: 

• Human Resources Department 
• Marketing Department 
• Finance Department 
• Production Department 

Human Resources 

The human resources department manages the people who work for the organisation. The main functional activities carried out by the human resources department are: 

➢ Recruitment and selection 

This is the process of finding the best people to come and work for the company. 

➢ Staff training 

It is the responsibility of the human resources department to give staff the training required to enable them to provide a good quality service to customers. 

Training will improve staff skills and can increase quality and profits. 

➢ Industrial relations 

Supports the relationship between the employer and the employee. This includes: working conditions 

➢ Health and safety 

The human resources department needs to ensure that all staff work within the guidelines set out in the appropriate health and safety legislations. 

➢ Industrial relations 

The HR department may have to maintain good communications with trade unions. 

➢ Employment issues 

The HR Department has to draw up contracts of employment for employees. 

➢ Redundancy 

If a business has to make people redundant, a strict formal procedure has to be followed before they can be laid off. ➢ Dismissal 

The HR department is responsible for giving formal warnings to workers and dealing with any legal requirement when laying off staff. 

➢ Disciplinary and Grievance procedure 

Sometimes workers may have to be disciplined owing to poor conduct, or they may have a problem with a work issue. 

Marketing Department 

The marketing department is concerned with finding out the needs and wants of potential customers and promoting the company’s products or services. 

The main functional activities carried out by the marketing department are: 

• Advertising 
• Market research 
• Promotion 
• Selling products 

Advertising 

Goods and services are often advertised on television or radio to inform customers about products. It is the job of the marketing department to decide how and when to advertise and to develop advertising campaigns. 

Market research

To find out if a product or service will be successful a company will use market research. Market research is the process of gathering information on customers’ needs and wants. This can be done through surveys, observations or interviews. 

Sales Promotion 

The marketing department will decide which form of promotion would be best suited to the product such as a percentage discount or buy one get one free. (BOGOF) 

Selling products (pricing) 

The marketing department is responsible for increasing sales of a product through correct pricing and designing attractive packaging. 

Customer service 

Many businesses focuses on the providing good quality customer service 

Public relations 

Communication between the company and the general public, including shareholders and potential investors. 

Product Planning 

This involves deciding which products should be charged for the range of products sold by the business. 

Distribution 

Marketing people will be employed to make sure that products are made available to consumers in the right place at the right time. 

Finance Department 

The finance department is responsible for managing money, including preparing a budget. The finance department is responsible for managing the money coming into and going out of the business. They will deal with all the financial aspects of the business such as paying suppliers, paying staff wages and receiving payments from customers. 

Relationships and Interdependence between Departments 

Working together 

In a business, it is extremely important for departments to work together. For a business to be successful, its key areas – marketing, business operations, human resources and finance – cannot work in isolation. Marketing 

The marketing department must work with business operations, human resources and finance to be successful: 

• Human resources must ensure that marketing employees are recruited and trained properly.
• Operations must ensure that the business can keep up with the demand created by marketing and that the supply chain runs effectively. 
• Marketing relies on the finance department to ensure that it has enough money to run its marketing campaigns effectively. 

Business operations 

The operations department must work with human resources, marketing and finance to be successful: 

• Human resources must ensure that operations employees are recruited and trained properly. Marketing must create demand for the products or services that the operations department is working on. 
• Operations relies on the finance department to ensure it can purchase supplies, transport and store goods, and oversee the general day-to-day running of the business. 

Human resources

The human resources department is extremely important to the rest of the business. It must make sure that the operations, marketing and finance departments have enough employees. It must also make sure that those employees are effectively trained and managed. 

Finance 

The finance department must work with human resources, marketing and operations to be successful: 

• Human resources must ensure that finance employees are recruited and trained properly. 
• Finance must provide marketing with an effective budget and enough financial resources to enable it to create demand for the business’ products and services. 
• Finance must also ensure that the operations department has enough money to purchase supplies, transport and store goods, and oversee the general day-to-day running of the business. 

Production Department 

Involves making goods and providing services. In many businesses, the majority of workers are employed in the production department. 

• Design: Some firms design products for individual customers. Others are continually innovating by designing new products to meet changing customer needs.
• Purchasing: This involves buying the resources needed by the business, such as raw materials, components, energy, tools, equipment and packaging.
• Stock control: This involves storing, controlling, supplying and handling stocks of resources and providing information about stocks. There will be close links between purchasing and stock control.
• Maintenance: Some production departments have a team of maintenance workers. They might be responsible for cleaning and the maintenance of machinery and business property.
• Research and development (R&D): In some industries, such as pharmaceuticals, automotive, electronics and computers, firms have large R&D centres. They are responsible for the investigations and discovery of materials, processes and products.

All four functional areas within a business are required to work together in order for the business to achieve its aims and objectives. Each department relies on the others to enable them to complete their specific functional activities. 

Some examples of how functional areas are interdependent are as follows: 

• It is the responsibility of the human resources department to recruit and select appropriate staff to work within the marketing, finance and operations departments. 
• It is the responsibility of the marketing department to carry out market research to find out the needs and wants of customers. The operations department will then make the products to meet those requirements. 
• It is the responsibility of the finance department to set budgets for the marketing department so they know how much they have to spend on advertising and promotion. 
• It is the responsibility of the human resources department to organise training for staff so they are able to operate the machinery required to produce the product for the operations department.