© boardworks ltd 2008 1 of 32 1.4 functional areas within business organizations unit 1: exploring...

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1.4 Functional Areas within Business OrganizationsUnit 1: Exploring Business Purposes

1.4 Functional Areas within Business Organizations

Unit 1: Exploring Business Purposes



Contents


For more detailed instructions, see the Getting Started presentation

Teacher’s notes included in the Notes Page

Flash activity (these activities are not editable) Web addresses Printable activity

Key skills Extension activity


Functional areas


AdministrationIT SupportCustomer ServicesOperationsProductionDistributionFinance and AccountsHuman Resources (HR)Marketing and SalesResearch and Development (R&D)

In this section, you will consider the different functional areas of businesses and the tasks they perform.


Delivering key functions

Businesses must be run efficiently to achieve their aims and objectives.

In medium or large businesses, such as Tesco, the functions are performed by individuals working as members of functional areas, or departments.

How many departments do you think a Tesco store might have? What might they be?

In small businesses, individual people complete the functions.

To be able to sell products, specific functions must be performed by the staff regularly.


Functional areas anagrams


Administration and IT Support

The Administration and IT Support functions are responsible for a range of tasks which help the business to run smoothly.

clerical tasks manning the reception deskcleaning and maintenancehealth and safety

How do the Administration and IT Support functions affect the other departments?

If the following duties are not performed properly, the other functional areas will not be able to complete their tasks and the business might fail its customers:

securityhardware/software support network management.


Customers are the most important part of any business.

Customer Services

offering information, advice and credit facilities

arranging deliveries

providing after-sales service

managing complaints.

How do you think the Customer Services team affect the other departments?

The Customer Services department is responsible for looking after customers’ needs to make them feel valued.

The Customer Services team has a number of tasks:


Complaint scenarios


Case study: Customer service at Tesco

Tesco tries to achieve its core purpose by offering excellent customer service and following this value: No-one tries harder for customers.

www.tesco.com is an online shop where customers can buy their groceries and have them delivered to their homes at convenient times.

Investigate other ways in which Tesco tries to offer its customers great service.

In 1999, Tesco launched www.tesco.com.


Operations

How does the Operations function affect the other departments?


Organizing resources


Resources at Thorpe Park


Production


Distribution

The Distribution function is responsible for transferring products from supplier to customer.

It must ensure that these goods are delivered:

to the right place at the right time in the right condition. Businesses strive to distribute

their goods as cost effectively as possible. Sometimes this means they will outsource the process to an external contractor.

Look up the terms supply chain and logistics and explain their relevance

to the Distribution function.


Finance and Accounts

How do you think the Finance and Accounts department affects the other areas?


Human Resources (HR)


Case study: HR at Tesco

Tesco is the UK’s biggest private sector employer, with over 260,000 employees.

Tesco’s core purpose: to create value for customers to earn their lifetime loyalty, can only be achieved if its staff perform their functions properly.

How do you think the Human Resources department affects the other departments?

Unhappy staff will work inefficiently and stop Tesco from meeting its objectives, so Tesco manages its staff through its HR department and offers them benefits like childcare vouchers, share schemes and pensions to keep them happy.


Marketing

The Marketing department makes customers aware of the goods or services that a business sells.

consider the business from the customer’s point of viewidentify customers’ needs and provide for themwork out what customers will need in the futurecollaborate with the Research & Development department to invent new goods and services.

How does Marketing affect the other departments?

Market research is used by businesses to identify what customers need and want.

Market research enables the Marketing department to:


Marketing mix

What will happen if a business chooses the wrong marketing mix?


There are four main types of promotion:

Promotion

Promotion is the term used to describe how a business communicates to customers: what it sells, how it will benefit them and why they should buy it from that specific business.

advertising

publicity

sales promotions

personal selling (part of sales).

Do you know what is involved in advertising, publicity, sales promotions and personal selling?


Advertising

A business promotes itself by advertising.

television, radio and cinema

Internet

magazines and newspapers

billboards

posters, etc.

Adverts are useful for targeting specific market segments. Companies like Cadbury, for example, promote their products to millions by advertising during primetime television.

What factors would the Marketing department need to consider when creating an advert?

This involves placing adverts in the media, including:


Publicity

Publicity involves creating an image or an impression by attracting the attention of the media.

press releases

sponsorship

award ceremonies

arranging speeches.

Why do you think Sainsbury’s sponsor the English Schools Football Association?

Popular ways in which businesses generate publicity include:

Unlike adverts, publicity is not paid for directly, so its effectiveness at targeting customers can be unpredictable.


Sales promotions

Sales promotions are ways in which a business tries to make its goods or services attractive to customers.

discounts

money-off coupons

competitions

free gifts

special offers

loyalty rewards.

When are sales promotions commonly used?

Common sales promotions include:


Types of promotion

Would small and large businesses use the same forms of promotion?


AIDA

Design your own advert for a product of your choice using AIDA principles.


Sales

Some products are personally sold to customers by specially trained sales staff from the Sales department.

Customers often like to ask for advice when buying expensive products. A salesperson can offer this advice and encourage the customers to spend more.

The Sales department is often split into further subdivisions:Sales staff sell within the store

Sales representatives travel to the customers

Telesales staff sell over the telephone

Merchandisers display the products strategically.


If the marketing mix for a new product is correct, sales should gradually increase.

Unless a business is continually expanding and developing its range of products, it cannot succeed.

Research & Development (R&D)

Product life cycle

However, after time, sales will begin to level and then decline.

This sequence is known as the product life cycle.


In order to avoid this, large businesses often have a Research & Development team, responsible for inventing new products, as well as improving existing ones.

Research & Development

Declining sales reduce a business’s income.

scientific advances

technological innovations

good ideas!

Improvements might occur as a result of:

How do you think the Research & Development function affects the other departments?


Case study: R&D at Thorpe Park

In March 2006, after 11 months of building, Thorpe Park opened the ride Stealth. It is Europe’s fastest and tallest launch coaster, but at £12 million, represented a huge financial consideration for its developers.

cost

price to charge customers

practicality: where, when, how

profit.

The R&D department designed Stealth, but the Marketing department were also involved in considering:


Business functions


Key functional areas


Assignment: Cookie Monster functional areas


Cookie Monster is a biscuit manufacturer. It has seven functional areas: Administration, R&D, HR, Production, Customer Services, Marketing & Sales, and Finance.

As a class, discuss the main purposes of each function in Cookie Monster. In particular, consider which functional areas are responsible for the following tasks:

- preparing and paying salaries- devising new cookie recipes- advertising new products- recruiting new production staff- keeping records of documents

- receiving customer feedback.

© boardworks ltd 2008 1 of 32 1.4 functional areas within business organizations unit 1: exploring...

Documents

functional areas boardworks

business purposes boardworks

contents boardworks

tesco tesco

support functions

members of functional

functional areas anagrams

customer services team