A business organization is a system of interconnected parts which must work together smoothly to achieve its business aim, for example become the biggest pharmaceutical company in the world.
For a business to operate effectively, various tasks are carried out by various functional departments including Human Resources (HR), Finance, Marketing and Production.
Most of the business organizations will have all these four functional areas which are interdependent. It means that Production needs information from Marketing which products to produce (e.g. size, color, number of products, etc.). Production also needs production workers with certain expertise to be hired by Human Resources. Finally Finance needs to provide information about what the maximum cost of production should be in order to make profit. This is interdependency of different business functions.
Let’s take a look at four business functions in details now.
Marketing
Marketing is not promotion or ‘brainwashing people’ with TV advertisements. Everyone who claims so, has no idea what marketing really is.
Marketing’s main job is to identify needs and wants of customers, and satisfy them profitably.
Marketing is also in charge of selling the product and ensuring that the firm’s products sell. This is done through a series of activities such as: market research, developing a new product, test marketing, sales forecasting, coming up with a suitable pricing strategy and distribution channel to deliver the product from the company to customers, promotion, branding to create certain perception of the product in customers’ minds and finally after-sale services.
In fact, basic functions of the marketing department evolve around the traditional 4 Ps of Marketing Mix:
Product. Ensuring that goods and services meet the customer’s requirements, such as a product’s various sizes, colors, packaging and core functionality. Other roles related to the product include product differentiation to create Unique Selling Point (UPS) and Product Position Mapping to find out customers’ perceptions of the product in relation to Price and Quality.
Price. Using various pricing strategies to sell the products of a business. Numerous pricing strategies can be used, depending on factors such as the business objectives, level of demand, the costs of producing the good or service, the number of substitute products available, level of competition, etc.
Promotion. Making sure that customers know about the firm’s products. This is often done through very expensive TV and Internet advertising in mass media, or cheaper methods relying on more direct interactions with customers such as direct selling, social media, sales promotions, or guerrilla marketing. Promotional activities will have three functions, i.e. communicate information about features and functionalities of the product, persuade customers to buy the product and remind them that the product still exists on the market.
These days, companies prefer to explore more economical, efficient and consumer-friendly marketing methods. Therefore, low-cost, high-exposure promotional products such as custom keychains have become the suitable choice. With their unique design and practicality, they can stimulate consumers' interest and curiosity, prompting them to actively learn about brands to convert them into actual purchasing behavior in the end. This efficient conversion mechanism helps to improve the company's Return on Investment (ROI) and brings more business opportunities and growth potential to the company.
Place. Ensuring that goods and services are available in convenient places for consumers to buy. Marketing managers must ensure that they select the appropriate distribution channel – a way to deliver products from the factory to the marketplace, e.g. to physical retail outlets like 7 Eleven or Lawson, online shopping platforms such as Alibaba or Tmall, Coca Cola’s vending machines, etc.
Finance
The finance department is responsible for everything related to money – managing the organization’s cash and bank accounts, maintaining accurate transaction records and preparing Final Accounts.
Finance Director must ensure that accurate recording and reporting of financial documentation takes place to comply with all legal requirements set by the government and inform those interested in the financial position of the business.
Bookkeeping is necessary to prevent deliberate understating of profits (to avoid corporate TAXes), or overstating of profits (to make the company look like a more attractive investment), and keeping shareholders and potential investors informed about the company’s performance.
Human Resources (HR)
This department is responsible for everything related to managing people (the personnel of the organization), mainly finding and recruiting the right workers, keeping them highly motivated in the workplace and properly handling those workers who are leaving the business.
In managing people, the HR department is likely to deal with the following issues: workforce planning, recruitment and selection, training, annual appraisals, dismissals and redundancies and outsourcing human resources.
Administration is also a part of Human Resources. It deals with inquires and documentation.
Production (or Operations)
The production department is in charge of converting raw materials and/or components (inputs) into finished goods (output) ready for sale and delivery to customers in the production process. Production Director manages the entire production process from start to finish.
Operations, with Operations Director in charge, applies to the process of providing services to customers as in the case of hairdressers, restaurants or banks providing financial services.
In small businesses like sole traders (owned by just one person), each business function is carried out by the same person – the entrepreneur himself or herself.
In large businesses, the four functional areas are highly interrelated with resources being properly allocated to each department making departmental roles easily identifiable. For example, the production department relies on the talents of effective marketing staff to sell products while marketers must have a decent product to sell and the necessary financial resources to do so, e.g. to pay for promotional campaign, etc.
