In the following article you will know what are the functional areas of a company and what are their purposes within organizations.
Just as the human body is made up of systems (nervous, muscular, circulatory, etc.) that perform specific functions that allow us to live, companies have functional areas that work together to operate efficiently.
Also called departments or business units, the functional areas of a company they have specific tasks, structured according to the type of business and size. As the company grows, it will need more support areas. These functional areas group skills and tasks to manage aspects of the business that have their own protocols and logic.
Functional areas of a company.
Knowing the different functional areas of a company is basic knowledge that every entrepreneur must have. For this reason we want to share with you what they are and their functions. Find them below.
Human Resources.
The main function of the human resources area is the hiring and training of new personnel entering the company.
Within this important task, is the design of tests and processes that allow selecting the right people. Not only those who have the necessary experience and skills to perform in the position, but also those who easily adapt to the organizational culture.
Additionally, the human resources area is in charge of determining salaries, compensation and benefits, as well as providing training and ensuring the health of labor relations. Remember that staff is one of the most important assets of a company.
Investigation and development.
As its name says, the R&D area is in charge of investigating, testing and developing new products/services. considering the Life cycle of a productcompanies need to dedicate part of their efforts to find new ways to serve their customers, that is, to innovate.
Through innovation is how organizations manage to create competitive advantage. The R&D department is in charge of providing this advantage in search of a better position in the market. He is responsible for the creation of new products, the redesign of existing products and the application of new technologies.
Production.
The main function of the production department is the transformation of raw materials into finished products. In short, he is in charge of manufacturing. This area is also responsible for managing the level of inventories and, of course, must follow certain standards to ensure the quality of each product.
Operations.
Another of the functional areas of a company is the operations department. The exact functions of this area vary depending on the type of business. However, its main function is to design, implement and evaluate the different processes of the organization. In short, it is to ensure that current processes are efficient (fast, using the least amount of resources but maintaining quality).
Marketing.
The marketing department should publicize the company’s products and services. That is, its function is to communicate with the market. To achieve this, they must develop promotional activities and advertising campaigns that highlight the features of their products and demonstrate their benefits to potential customers.
The marketing area is in charge of attract customers, maintain the loyalty of the existing ones and maintain the good image of the brand. Currently, the management of social networks and the content creation for the web page are other of its functions.
These activities have the ultimate goal of boosting sales and contributing to the growth of the company. No matter what type of products or services the company has, marketing must drive demand and spread the word about its offerings.
Finance/Accounting.
For a company to survive, it must not only generate income, it must manage it wisely, and the financial area is in charge of taking care of these resources.
Among its functions, the financial or accounting department must manage the company’s accounts (receivable and payable) as well as payroll management. Additionally, it is in charge of preparing the financial statements; As the Statement of income, balance sheet and the cash flow. These reports contribute to the elaboration of budgets and projections.
Shopping.
Purchasing is the department in charge of the process of acquiring raw materials, supplies, equipment and everything the company needs for its perfect operation. The purchasing area is responsible for receiving the purchase orders made by the other departments and acquiring what is requested in the right quantities and at the right time.
The purchasing department has a great responsibility. If the purchasing process fails, there is a risk that the company will not be able to manufacture the necessary products that generate sufficient volume to meet customer demand.
Additionally, purchases must ensure that they get the best prices while maintaining the quality of the inputs to meet production standards.
Sales.
Within the functional areas of a company, the sales area plays a very important role. She is in charge of closing deals and generating money for the company. This department works hand in hand with the marketing department since sales are part of the brand communication and product promotion processes. Sometimes sales and marketing are part of the same department.
Distribution.
The distribution area is responsible for ensuring that the product reaches the hands of customers on time, in the right place and in perfect condition. For this, you must create and/or use channels that allow you to transport products, complying with the requirements that guarantee a successful shipment.
Customer service.
Customer service is the area in charge of addressing customer concerns, requirements and complaints. Customer service representatives are the first line of contact with the public. This area is in contact with customers before, during and after the sale, through call centers, online chats and/or representatives at points of sale.
A good customer service department has the responsibility of creating and maintaining an excellent relationship between the company and its customers. Good service can result in loyalty and in some cases customers willing to pay more for a product.
IT Technology.
Currently, the technology area is an essential part of any company. All the information is stored on servers and the processes are controlled by computers, making the presence of computer expert personnel of great importance. Additionally, this department is responsible for the creation and/or management of software for use by other areas of the organization.
Legal.
This area is responsible for representing the company and/or its owner in legal matters before other entities. It also provides legal services to each of its departments and employees. It is the department in charge of ensuring that the company operates respecting all legal guidelines at a social, political and economic level.
Conclusion.
As you can see, there are many departments within a company. However, not all companies need them. Depending on the type of business and its size, organizations create the necessary departments to ensure its proper functioning.
Initially, a small business owner will take care of all of these areas himself. As his business grows he will see the need to hire and organize staff into these departments.
In some cases, areas such as legal or technology are outsourced. In this way, the administration can be in charge exclusively of the core of the business. Likewise, some organizations assign the functions of two departments to a single one, since their functions are related. For example, Marketing and Sales.
And remember, if you are really interested in creating your own business, you can read our book “How to create a company while working: Discover how to manage your time, manage your money and motivate yourself while creating a company and working for another” , where you will find all the information you need to found your own company, without having to leave your job.
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