All the businesses have their own way of structuring the functions (departments) or the tasks that they need to carry out. The tasks need to be done regularly e.g. buying stock, bills must be paid on time, customers have to be served and if customers have enquiries then they must be answered. Each business has a key function which is run by staff members. In the medium/ large business people specialise in different tasks and in the small businesses it will be carried by one or a few people. It is very important that the different functional areas work together very well. It is because most aspects of a businesses activities will involve different functional areas.
Function means departments and most business have a number of different departments. Each department has a specific job or a task to do, which is called ‘functions’. Businesses have many tasks which they need to do if they want to succeed.
The main key functions in business are:
Administration – This department is a support function that carries out a different range of tasks. The usual responsibilities of this function are photo copying, opening the main, preparing and filing documents, faxes and also sending emails. This department also deals with producing up to date reports processed on computer, clerical duties, deals with aspect of software support, security and health and safety. If they develop poor administration work then it can affect the company’s image and reputation. In administration every thing should run smoothly so the managers can concentrate on their job and on the task of running the business. In the big businesses administration is carried out in every department, rather than one department.
Customer service – This department is very important because it solves the customers and clients enquiries and complaints. Every customer has high expectations. When a customer contacts a business they expect the employees to be polite, respectful and knowledgeable. This service helps the customer before and after a sale has been made by providing information, giving advice, credit facilities, delivering goods etc. Every business has a trained staff which can handle enquiries and complaints in a polite and professional manner.
Distribution – This means ensuring the goods are delivered to the right place on time. Most businesses might deliver goods to customer’s homes, it’s mainly when you buy products online .e.g. Argos delivers things that you buy from them on their website, to your home. The superstores may have their own special vehicles, which they might use. They also have to plan the vehicle routes to avoid back tracking and this saves them money because it keeps the fuel costs down and it also saves time. It can be complicated most times because you have many vehicles, with different load. Most of it is urgent and some are not.
Finance – This department is most important because it shows the business if they are making profit or loss and highlights the earning and spending of the business. The department keeps a record of the money which is coming into the business and which is leaving the business. The records allow the business to track financial data and assist in controlling its spending cost and income levels. In most large businesses, there are different types of financial experts which are employed such as management accountants, financial accountants and credit controllers. The management accountants prepare cash flow forecasts and also monitor budgets and income form sales and they always keep their senior managers informed.
Human resources – This department deals with the hiring and firing of employees, training staff, leave and pay. This department maintains records on all members of workshop, both those working full time and part time. Every organisation looks after their staff on the basis that if they are trained well they are committed to the aims of the businesses, the organisation is more likely to succeed.
ICT – Every business has a number of ICT tasks which are carried out on the computer for the data to be stored. The smallest businesses even need someone who understands ICT. The big organisations have a computer network, where all the staff computers are linked through servers. ICT function has to maintain the servers, install new software, additional hardware and other computer related equipment. They will also be expected to update senior managers on technological developments, which will benefit the company.
Marketing – This department deals with meeting the customer needs. Many businesses consider this department so important. This department carries extensive research on a particular market to find out exactly what customers want. In every organisation employees are trained to put the customers first. The other way to understand marketing is through marketing mix:
Product: Product is one thing that all businesses need to know what customers want e.g. what do they want to buy? What new product are we offering? And in which areas are sales growing etc. These are some of questions which most businesses might ask to meet the customer’s needs.
Price: Price is an important issue because they have may have other competitors which might have the same products with lower prices so they might ask these questions e.g. how much should we charge? Should we charge as much as we can? What discount should we give? These questions might help them to decide.
Promotion: The businesses might have the issue of how should they promote their product e.g. should they have specialist sales staff? Should they advertise the product to promote it? How can they obtain free publicity?. Most businesses do most of these things to promote their businesses.
Place: The businesses first think, of place before they start selling them. They might ask these questions; How should we sell the product-direct to the customers or through retailers? Do we need specialists to sell them? What can we sell through the phone?.
All these questions are considered by marketing staff and they start this by carrying out market research to identify customer needs. It also gives them the edge over their competitors. Marketing is responsible for the promotional activities which tell the customers what is available because there is no use in developing a new product or service which no one knows about. Therefore marketing might advertise the product, sale promotion and publicity campaigns to promote the product.
Sales – This department has the responsibility of convincing customers to buy the company’s products and services. It would be pointless having a great product or a service if no one buys it. Most businesses might have sales as their targets as a part of their aims and objectives for that reason. It is expensive employing a skilled sales force, especially when they get bonuses or commission. There are also many benefits because they might convert many enquiries into firm sales and they might also build strong links with customers to encourage them to come again. There is also a strong link between marketing and sales and in many organisations they might be in a joint department.
Production – This involves producing goods or services for the customer. This section must ensure that products are produced on time and are of the right quality material. The production also includes:
Production planning: This involves deciding what will be made and when it will be made and to do this they have to use a realistic timescale.
Production control: This means checking the progress again and again to see if they what they are producing plans are met.
Machine utilisation control: This means minimising all problems by keeping the equipment and machinery in good working order. Because sometimes it may produce damaged goods and if it breaks down all together then production of that product will cease. This aspect is very important so that’s why most businesses have a maintenance plan, which tells the dates which machinery’s will be out of date of operating for inspection and servicing.
Staff utilisation control: This concentrates on staff if they are working effectively and efficiently.
Final quality checks: This makes sure that if the product is of the correct standard or not and this can be done in different types of ways e.g. examined by hand, passed through a machine which checks that etc.
Research and developing (R ; D) – This function is concerned with developing new goods or services and improvements to existing products. This department also tests the products to make sure that they meet quality standard and include some other activities such as technological developments, scientific research, design features and performance of products.
(Reference book: BTEC First 2nd edition business 27- 41)
ASDA is a supermarket chain which retails food, clothing, toys and general merchandise and they also have a mobile network, called ASDA mobile. The ASDA Stores Limited was founded as Associated Dairies ; Farm Stores Limited in 1949 in Leeds. ASDA products are known as Cheapest on Display in a product category in ASDA stores. It also owns range of clothing known as George, which is marketed as quality fashion clothing at affordable prices. Asda simply attaches its own brand to products provided by other companies. Services they offer include insurance (provided by Norwich Union), credit cards (provided by GE Capital Bank) and loans (provided by the Funding Corporation).
Functional areas in ASDA:
Marketing and sales
This department takes care of all enquires and complaints that customers might have and gives them the right information about product and services. The staff that work in customer services solve any problems that customers might have for example giving them positive advice and replacing any damaged goods, because of this customers might want to go back to ASDA again. They also see customer’s feedback which is used to improve customer service and satisfaction.
This department deals with all financial records, all the money earned and spent. The staff working in ASDA record all the money received and they also produce invoices for the business and also chase any up overdue payments. The finance staffs working in ASDA prepares the payroll and pay staff wages of the employee. The senior staffs of finance department predicts any profit/loss by producing cash flow forecasts to check when they can buy expensive items such as machinery for packaging.
The Human Resource department deals with hiring new employees and keeping the current workers happy and satisfied with their work. This department aim is to ensure that business retain good and experienced staff. They record all job applications and arrange interviews and maintain staff records.
Marketing and Sales:
The Marketing and sales department carry out all market research and promote products and services through advertising, TV, internet, trade shows and exhibition. This also includes designing, updating and promoting the company website because it is a major method to communicate and attract customers.
Kassam Newsagents is a small corner shop situated near a primary school in Cheetham Hill, Manchester. The shop has things like sandwiches, drinks, and snacks. Kassam Newsagent shop also sells product such as newspapers, magazines, cigarettes and mobile top-ups. The Kassam Newsagent shop makes profit each month. The business offers their goods at a price which they can make a profit from. They have their own openings times which are according to them. This shop is family owned and is a sole trader business.
Functional areas in Kassam Newsagent:
Human Resources (HR)
This is a small business so every employee will have some admin responsibilities. For example, the owner will answer calls and open mail, others will do photocopying and prepare and fill documents such as letters. Most of these responsibilities will be carried out by the owner.
The customer service is very important for both organisations small and big businesses.This business always tries to keep happy their customers by giving them consistent and reliable service. If the owner hires some one then they will have to give training to the workers how to handle customers. If there any problem occurs, all the staffs’ aims to solve the problem.
This function is very important for all businesses. In the Kassam Newsagents it is owner’s responsibility to keep all records of money such as the money spent on stock, paying bills and the money earned by sales. This function will also check whether the business is making profit or loss. All these activities are carried out by the owner of the shop, who might receive extra help by an accountant who they pay.
The Human Resources function is responsible for personnel recruitment and management. The owner will carry out all responsibilities of the HR function in the sole trader business because the function is very small. Because they have a small business they do not have to advertise their jobs on a big scale but they advertise in local newspapers and in job centres. When new employees join the business, the owner will give an induction to their employees and he will also observe them to see how well they are doing the job.
The sales function is handled by the owner of the shop. Sales are important as it makes profit for the owner. The owners and the other workers (family members) in the business talk to customers and sell for profit. They also try to make customers happy so that more customers come in and sales go up. Being a small business the owner and employees will be responsible for responding to all enquiries from customers. In this business the sales role is quite limited and involves selling products as quickly and efficiently as they can.