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- What Are The 8 Business Functions? A Simple Explanation
Table of Contents
Introduction to Business Functions
Business functions are the main activities that businesses need to perform in order to operate successfully. In a large company, each function may have its own department (such as the HR, Finance, or Marketing departments), but in a small business, the owner may handle all the duties, including hiring and firing employees, keeping track of company finances, conducting market research, and managing advertising campaigns.
In Business Studies, we learn that there are 8 business functions, namely:
General Management
Administration, human resources (hr), public relations (pr).
- General management is responsible for supervising all business operations. They make the important decisions which ensure that all the various business functions work harmoniously together, so that the company can run as efficiently and profitably as possible.
- Example : The CEO of a restaurant chain would form part of general management. They would decide things like opening new locations, creating new menu items, and ensuring that each restaurant is making a profit.
- Administration carries out a variety of support tasks that help the business run smoothly. Administrative duties include tasks such as communication, both written and verbal, gathering and processing data, as well as storing and sharing information.
- It includes typing documents, scheduling meetings, recording minutes, handling business inquiries, and greeting visitors at reception. IT also forms part of administration as it deals with data.
- HR is responsible for finding the most suitable employees and keeping them in the business. It also manages leaves, payroll, skills training, and conflict resolution.
- Example : In a software company, the HR would be responsible for posting job adverts when they need new software developers, ensuring employees get their salaries on time, and helping to resolve disagreements between coworkers.
- Marketing involves identifying customer needs by conducting market research, and meeting those needs by deciding on a product that satisfies the need at an attainable price. It also includes promotion which creates public awareness of the product and a desire to buy it.
- Activities include, using questionnaires and surveys to identify consumer needs and desires, ensuring that the prices are suitable for the target market and using adverts and other strategies to attract potential buyers.
- Note : Advertising and promotion are only a component of marketing. There is more to marketing than just advertising.
- The financial function is responsible for handling the money of the business. They acquire funds and manage the utilization thereof. This is includes keeping track of income, expenses, and profits, and ensuring that the various departments are sufficiently funded, and the business’s finances are healthy.
- Example : In a clothing retailer, the finance team would monitor how much money is made through clothing sales, how much is spent on rent, salaries, and other expenses, and determine whether company is making a profit.
- PR manages the company’s reputation. Their job is to create and maintain a positive image of the business, internally (with employees) and externally (with the public and other stakeholders). They do this by managing social media accounts, publishing press releases, responding to crises and customer feedback, as well as publishing internal newsletters.
- Example : If a restaurant accidentally serves a spoiled dish and a customer complains online, the PR team would respond with an apology, explain how they’re fixing the issue, and reassure other customers that they take food safety seriously.
- The purchasing function is responsible for getting the materials and supplies that a business needs to make its products or provide its services. They find the best deals and make sure everything arrives on time.
- Activities include sourcing suppliers for raw materials, trading goods and office equipment, negotiating long-term contracts and maintaining healthy relationships with suppliers.
- The production function is responsible for creating the products or services that a company sells. It is where inputs (labour, capital, resources) are turned into outputs (finished goods or services).
- Example : In a toy factory, the production function would design, assemble, and package the toys. In a toy store, it would include displaying the shelves in an attractive way, helping customers find products, and completing transactions.
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September 12, 2023
Basic Business Concepts , Business Operation
Business Functions
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Purchasing. Production. General Management. General management is responsible for supervising all business operations. They make the important decisions which ensure that all the various business functions work harmoniously together, so that the company can run as efficiently and profitably as possible.