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BSc (Hons) Business Management with Foundation
World of Work
Name: Alexandra Mihaela Dinca
Table of Contents
1.0 Introduction 2
2.0 What is a business? 2
3.0 What is Functional areas of business – Definition 2
4.0 What are the key functional areas of a business? 2
5.0 Description of the various functional areas in business organizations 3
6.0 Description of the types of skills needed by employees to be able to work effectively in these functional areas 4
7.0 Conclusion 6
Business can be defined as an enterprise involved in commercial activities with the aim to make profits. It is carried out effectively with the help of different aspects, which controls the business operations. The reason to segregate functions of business in functional areas is to help the organisations function within its area, thereby increasing the effectiveness and efficiency of the business. There are six functional areas in business firms like marketing, customer service, finance, research and development, human resources and sales.
The report will advise John regarding various functional areas in business organisations that ensure its effective and efficient functioning. Besides, the report will also describe the types of skills that employees need to work effectively in these functional areas.
2.0 What is a business?
Business is defined as an enterprise involved in industrial, professional and commercial activities, which promotes employment opportunities, life-style growth and growth in the economy. In other words, business involves an exchange of products and services to make money, seeking profits and improving the life-style (investopedia.com, 2020).
3.0 What is Functional areas of business – Definition
Business organisations have different functions, which are performed by a different department or functional areas. Functional areas are a team of employees possessing similar skills and expertise. It is a grouping of activities based on the need to accomplish one or more task (Nawaz and Koç, 2019).
4.0 What are the key functional areas of a business?
There are six key functional areas in business organisations like
Marketing: It is the action of promoting and selling products through advertising them.
Human Resources Management: It is the system of recruiting, selecting employees, providing training and development, orientation and other such functions.
Customer service: This is defined as the assistance provided by an organisation to its clients in case they face any issue or require any help regarding it.
Finance: Finance is the management of a large amount of money and involves the planning of investment as per the requirement of the company.
Research and Development (R&D): R&D is described as activities that companies undertake to produce new products or develop the existing ones.
Sales: It is described as activities that involve selling products or service to consumers and gain profit.
5.0 Description of the various functional areas in business organizations
The objective of marketing is to increase sales and generate revenue for the business. The planners identify the needs of the consumers and determine how to approach consumers (Kotler et al., 2019). Marketing must be designed in such a manner that the market is first assessed, the needs of the consumers are determined and then the product or service is extended to the underserved areas.
5.2 Human Resource Management
The planner must understand the need for human resources as hiring able, efficient and skilled employees are essential for the working of the business organisation. Therefore, it is important to identify the type of skills required for the success of the firm, instead of hiring an employee without examining those (Papa et al., 2018). The task of human resources is also significant for building up the relationship among the employees and addressing their issues (Olson et al., 2018). This is important as for the success and growth of a business, the concerns of the employees’ must be considered.
5.3 Customer Service
Customer service retains the customers and derives more value from them. The business organisations aim to provide the best customer service to gain a good brand value for the firm, which helps in gathering loyalty and more profit for the firm (Radovic and Salamzadeh, 2018). Customer service helps to build more brand value and popularity as the organisations can advertise themselves for providing consumer-oriented services.
It is an important functional area for business organisations, as business firms need loans or investments, besides determining their budget. Running a business properly requires rational prediction of cash flow and a business organisation must form an expenditure budget depicting the potential revenue of the firm (Duska et al., 2018). Such information is obtained by studying the potentialities of the business and analysing the market demands.
5.5 Research and Development
It is an important functional area for business organisations, as business firms need loans or investments, besides determining their budget. Running a business properly requires rational prediction of cash flow and a business organisation must form an expenditure budget depicting the potential revenue of the firm Duska et al (2018). Such information is obtained by studying the potentialities of the business and analysing the market demands.
Sales interactions play a significant role in building good relations with consumers. During sales interactions, the customers are urged to refer the firm to their acquaintances, which results in the growth of the business and increase the popularity of the firm (Alvarez-Milán et al., 2018). Therefore, sales are important for improvement in brand awareness and growth.
6.0 Description of the types of skills needed by employees to be able to work effectively in these functional areas
6.1 Skills needed by Marketing employees
Marketing needs a broad mix of skills to succeed in the industry. The most important skills needed by marketing employees are interpersonal skills, which is essential to communicate with others effectively. This involves proper behaviour and tactics aiming to gain a competitive advantage over the rest. Creativity and imagination are essential to advertise the brand in the market as this would attract the consumers towards the business and will describe what makes the brand unique (Kotler et al., 2019). Information Technology (IT) skills are essential, with the development of technology, as this helps to gain information, save time and money and solve technical issues independently (Wilburn and Wilburn, 2018). Therefore, the main objective of marketing is to market the products of the brand to gain consumer attraction, which requires skills to eliminate competition and gain attention.
6.2 Skills needed by Human Resource Management employees
The primary task of HRM employees is communicating the ideas and values of the brand with the employees. This requires great communication skills, which would create an impression about the brand on the employees, or candidates that aspire to work in the company. The HRM needs to make decisions upon which the progress of the company depends (Olson et al., 2018). The decisions involve recruitment of the right talent and retaining the deserving employees, which are significant for strengthening the workforce of the company. Empathetic skills are important for HRM as it deals with the concerns of the employees and the issues that they may face (Papa et al., 2018). To understand the concerns of the employees, the HRM needs to have empathetic skills to listen to the employees and ensure that their needs and demands are considered.
6.3 Skills needed by Customer Service employees
The task of customer service employees is to listen to the issues faced by the consumers, identify the cause of the issues and finally advise or take necessary measures to resolve the issues. Therefore, such employees need clear communication skills, to convey advice to the consumers in a comprehensive manner (Radovic and Salamzadeh, 2018). Such employees also need to be skilled with patience while understanding the problems faced by the employees. Finally, self-control and adaptability are essential to deal with various customers and their diverse issues.
6.4 Skills needed by Finance employees
Finance occupies an important position in business operations and its success. Without proper accounting practices, the business may collapse which leads to the need to have well-skilled financing employees. The finance employees must be skilled with a formal accounting qualification, which will enable him to understand the subject better and perform efficiently (Duska et al., 2018). Such employees must possess analytical skills to analyse the financial requirements of the company. Knowledge of IT software and commercial acumen is also essential for finance employees to save time and cost in doing their tasks and preventing business firms from incurring a loss.
6.5 Skills needed by Research and Development employees
R&D is a principal aspect of every business, especially the big ones as it helps to improve the existing products and services and develop new ones. This requires massive investment and proper direction to identify where the investment needs to be made. Therefore, R&D employees should be an efficient analytical thinker and critical problem solver to solve the issues effectively without incurring any loss to the company (forrestbrown.co.uk, 2019). The employees must have the ability to perform high-level data analysis to analyse which department needs R&D and what should be an effective way for investment. Hence, R&D employees should have a knack to understand the R&D requirements by analysing the data.
6.6 Skills needed by Sales employees
The sales employees need to have active listening skills focusing on the speaker and not being preoccupied with anything else. He should have the patience to listen to the consumer without interrupting or countering the latter. Sales employees must have the skill of adaptive selling to increase sales performance, thereby increasing the profits made by the company (Alvarez-Milán et al., 2018). The employees must possess the skill of understanding the product that he is selling which would enable him to sale the product better by explaining the consumers about it, which would create a good impression on them.
Thus, it can be concluded that business improves the quality of life-style and keeps the economy progressive, which is essential for employment opportunities, health improvement and offers a source of comfort. Business can operate effectively with well-defined functional areas that help to build efficiency and effectiveness. The six functional areas in business have different functions like marketing, sales, R&D and others, which help to accelerate the growth of business and its operations. Therefore, functional areas play key roles in the success of a business and its sustainability. Business requires skilled employees to serve the company and contribute to its growth. Hence, recruiting the right talent is essential for the company’s success. Different functional areas in business require a different set of skills, which is important to be considered before recruitment. Therefore, a company should analyse the required skills before recruiting employees.
Alvarez-Milán, A., Felix, R., Rauschnabel, P.A. and Hinsch, C., 2018. Strategic customer engagement marketing: A decision making framework. Journal of Business Research, 92, pp.61-70.
Duska, R.F., Duska, B.S. and Kury, K.W., 2018. Accounting ethics. John Wiley & Sons.
forrestbrown.co.uk 2019 What is R&D? Its role in business and how it relates to R&D tax credits [Online] Available At: https://forrestbrown.co.uk/news/what-is-r-and-d/ [Accessed 9th February 2021]
investopedia.com 2020 Business [Online] Available At: https://www.investopedia.com/terms/b/business.asp#:~:text=A%20business%20is%20defined%20as,%2C%20industrial%2C%20or%20professional%20activities.&text=The%20term%20%22business%22%20also%20refers,goods%20and%20services%20for%20profit. [Accessed 9th February 2021]
Kotler, P., Kartajaya, H. and Setiawan, I., 2019. Marketing 3.0: From products to customers to the human spirit. In Marketing Wisdom (pp. 139-156). Springer, Singapore.
Nawaz, W. and Koç, M., 2019. Exploring organizational sustainability: Themes, functional areas, and best practices. Sustainability, 11(16), p.4307.
Olson, E.M., Slater, S.F., Hult, G.T.M. and Olson, K.M., 2018. The application of human resource management policies within the marketing organization: The impact on business and marketing strategy implementation. Industrial Marketing Management, 69, pp.62-73.
Papa, A., Dezi, L., Gregori, G.L., Mueller, J. and Miglietta, N., 2018. Improving innovation performance through knowledge acquisition: the moderating role of employee retention and human resource management practices. Journal of Knowledge Management.
Radovic Markovic, M. and Salamzadeh, A., 2018. The importance of communication in business management. In Radovic Markovic, M., & Salamzadeh, A.(2018). The Importance of Communication in Business Management, The 7th International Scientific Conference on Employment, Education and Entrepreneurship, Belgrade, Serbia.
Wilburn, K.M. and Wilburn, H.R., 2018. The impact of technology on business and society. Global Journal of Business Research, 12(1), pp.23-39.
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