Functions of an
Organisation
Business and the Business
Environment
1
Concept of organizational function
• The transformation process
of the firm requires
activities and resources.
• These activities and
resources are arrange into
sets which called functions.
purchasing
production finance
Marketing
administration
Research & human resource
development management
2
Common organisational functions
Purchasing/
Administration
Logistics
optional
Marketing &
Sales
HRM Production
Customer
service
optional
Finance R&D
optional
Administration
• Support the operation of the
organization: IT support,
reception, office care…
• Not the central purpose but all
organization must have people to
do this task.
• Help to “organize” the firm
• Know who does what in the firm
• Have close understanding of the
business across all of its functional
areas
3
Administration
• Examples of administrative tasks:
• Collecting, distributing and dispatching the mail
• Storing, retrieving paper and electronic records
• Organising meeting and preparing meeting documents
• Responding promptly to enquiries
• Sending and receiving messages by phone, fax or email
• Making arrangement for visitors
• Making travel arrangement
• Making arrangement for events
Finance
• Concern with managing the business’s money Providing critical
information for decision making
• Link to all functions in the business
• Contains two parts: accounting and financial management
is the language and tools of finance
Accounting ● Balance sheet
● Income and expenditure
● Cash flow
● Allocate funds to current and fixed assets
Financial ● Obtain the best mix of financing alternatives
management ● Develop an appropriate dividend policy
within the context of the firm’s objectives
4
Finance
Task examples
• Producing invoice, checking payment received
and chasing up overdue payment
• Recording money received
• Checking and paying invoice received
• Preparing payroll and paying staff salaries
• Monitoring departmental budgets to check managers not over spending
• Issuing regular budget reports to all departmental managers
• Producing cash flow forecasts and regular financial reports to senior managers
• Advising senior managers on sources of finance or capital expenditure
Human resource management
• HR refers to the workforce of an organization that is employed to achieve
organizational goals
• HRM deals with
• Employment: procuring and employing individuals with suitable knowledge,
skills, experience and aptitude necessary to perform various jobs
• HR development: developing the workforce so that both the employees and the
organisation in turn can achieve their goals
• Employee relations: dealing with the employees, in the organisational context, as a
social group that contributes to the organisation
• Compensation: including all the rewards that an employee receives during the
course of his or her job–for his or her contributions to the organisation
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5
HRM function
Employment HR development Employee relations Compensation
Job analysis Performance Increasing employee Job evaluation
HR planning appraisal productivity. Wage and salary
Recruitment Training Keeping the employees administration
Selection Management satisfied & motivated. Incentives
Placement development Developing team Fringe benefits
Induction Career planning building, team
and development management, leadership
skills.
12
Human resource management
• Example task:
• Recruitment and retention
• Dismissal
• Redundancy
• Motivation
• Professional development and training
• Health and safety conditions at work
• Liason with trade unions
13
6
Marketing & sales
• Refer to the process by which organization identify and satisfy
customer needs profitably and efficiency
• Contains the following
• Market research
• Promotion strategy
• Pricing strategy
• Distribution strategy
• Product: advice on new product development, product improvement,
extension strategy, target market
• Marketing finance
• Sales strategy
14
Production/ Operation
• Major function to transform input (resources) to output (good or
service)
• Function that indicates the dynamic and on-going business
• Involve planning, organizing, coordinating and controlling the
resources needed to produce a company’s good or service.
• Work with people, equipment, technology, information, etc…
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7
Production/ Operation
• Task examples
• Acquiring resources
• Planning output – labour, capital, land
• Monitoring costs
• Projection on future outputs
• Production method: batch, flow, job, cell
16
Research & Development
• Improve the product or the way to make the product help
organization grow
• Expensive
Usually in large firm
other firm thus replicate
• In some industry R&D is the main source of business growth
• Car manufacturers
• Pharmaceutical companies
• Discussion: think about examples of R&D in different industry
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8
Research & Development
• Task examples
• New product development
• Product improvement
• Competitive advantage
• Value added
• Product testing
• Efficiency gains
• Cost savings
18
Customer service
• This function is vital to keep the customers loyal to the business
• This function look at the customers’ enquiries, concerns or
complaints
• Task examples:
• Answering customer enquiries about products and services
• Providing specialist information and advice to meet customer needs
• Solving customer problems
• Providing after-sales services
• Dealing with customer complaints in accordance to company procedures
• Analysing record of customer complaints to resolve problem areas
• Using customer feedback to improve customer service and satisfaction
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9
Group discussion
What is the most important function in the organization and why?
Choose an organizational function and explain:
• How it interrelates to other functions in the business
• How it relates to the organizational purpose
20
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