Business and the Business Environment | My Assignment Tutor

1Session 6: The various functions within an organisation(P3- part 1)1P3: Explain the relationship between different organisationalfunctions and how they link to organisational objectives andstructure.Unit 1: Business and the Business EnvironmentDr Reza AboutalebiObjectives of the SessionBy the end of the session students should be able to Explain the role of marketing, finance, humanresource management and operations within anorganisational context and the interrelationships. Explain how functions relate to overall organisationmission and objectives.22Organisational FunctionsBusinesses have a range of key functions. Variousdepartments carry out these key functions. Functionalareas are needed to so work can be carried outefficiently and effectively3 Marketing Finance Human Resource Management (HRM) Operations (Production) IT Services/Administration Customer Service Research & Development (R&D)Organisational Functions Marketing/Sales Market research Market analysis Market strategy Sales team Finance and Accounts Cash inflows Cash outflows Capital4Function of marketingis finding and keepingcustomers by introducingthe organisation and itsproducts to the potentialbuyers and identifyingcustomers’ needs.Function of finance ismanaging money toensure the organisationhas required money/credit to survive and togrow.3Organisational Functions Human Resource Management Recruitment Retention Training Conditions of work Worker representation Health and safety5Function of humanresource managementis finding and keepingsuitable staff for differentdepartments of theorganisation to ensurethat all departments cando their jobs withenough qualified staff.Organisational Functions Operations Getting the right materials and equipmentPlanning productionMonitoring productionMonitoring budgetsProviding servicesMonitoring quality  Customer services InformationCustomer supportAfter-sales supportCustomer advice 6Function of operationsis producing the productor providing serviceswith satisfactory qualityat a reasonable price atappropriate time.4Organisational Functions Administration/IT Support Clerical workCleaning and maintenance Technical supportSecurity Research and development (R&D)Improving existing productsExperimenting with new ideasResearch into new productsNew product development 7Objective of Business Functions8Function Basic Objective MarketingTo attract and retain customersProductionTo produce products at lowest costFinanceTo manage money & budgets Human Resources To recruit, train, pay & promote staff PurchasingTo purchase products at lowest costR&DTo develop newest technologiesEngineeringTo design product specifications 5Relationship betweenOrganisational Functions All organisational functions such as ‘Marketing’,‘finance’, ‘human resource management’ and‘operations’ are interrelated. None of the departments or functions can workproperly without help and support of otherdepartments or functions. For example ‘marketing’ department cannot startpromoting a product without initially coordinatingwith ‘operations’, ‘finance’, and ‘HRM’departments.9Relationship betweenOrganisational Functions For example ‘marketing’ department before promoting aproduct first need to contact the ‘operations’ departmentto make sure the operations department has enoughcapacity and required materials to produce enoughproducts. Marketing department also needs to contact the ‘finance’department to request enough money to run themarketing campaign. Marketing also should contact HR department to requestrecruitment of enough people for the marketing andoperations departments for the intended marketingcampaign. 106Advantages and disadvantages ofinterrelationships betweenorganisational functionsAdvantages Higher organisationalefficiency Higher organisationaleffectiveness Lower interdepartmental barriers Greater sense ofcommunity among allstaffDisadvantages Slower decision makingat department level More complicateddecision making Increasing the possibilityof conflict of interests Too much pressure forinter-departmentalcoordination11Goals and ObjectivesOnce an organisation has developed its mission statement,its next step is to develop the specific objectives that arefocused on achieving that mission. Objectives refer tospecific measurable results for the initiative’s broad goals.An organization’s objectives generally lay out how much ofwhat will be accomplished by when.• Goal—explains how the mission will be realised;describes what is to be accomplishedExample: Having higher sale• Objectives—specify how and when goals will be metExample: Increasing sale by 40% in the next three years.127Common business objectivesMaximiseProfitTo SurviveTo grow insizeTo increasemarketshareTo increaseSaleTo gain agoodreputationto maximisecustomersatisfaction 13Common Business Objectives ObjectiveWhat does it mean?To surviveAt first it is important that the business is kept alive. It might not bemaking any profit, but the costs aren’t too high either.To increase sales(turnover)Businesses often want to increase the amount of money that they receivefrom selling their product to the customers.To maximiseprofitsTo make as much profit as possible, which is the reward for taking risks.To increasemarket shareAll of the businesses in a particular market can claim a percentage of thesales in that market. Many businesses aim to increase the percentage ofsales that they are responsible for.To growOver time, a business will look to expand. It might do this by opening newbranches, or by broadening it’s product range.To gain a goodreputationWord of mouth is one of the most powerful forms of advertising for smallbusinesses, and it is important that customers think highly of theirbusiness so they will return, and tell others to visit too.To maximisecustomerssatisfactionBusinesses want to increase the number of customers who use theirbusiness. This may mean attracting brand new customers, and trying tosteal customers from their competitors. 148Functions and Organisational Objectives Marketing, Finance, Operations, and HR arethe main functions. Every function helps to achieve organisationalobjectives. For example Marketing help to achievesurvival, growth and maximising profitobjectives by finding and keeping customers.15Functions and Organisational Objectives Organisational FunctionsMarketingFinanceOperationsHRMOrganisationalObjectivesTo survive√√√√To Increasesale√√To maximiseprofit√√To Satisfycustomers√√To grow√√√√ 16

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