Functional Areas of Business Essay
Functional Areas of Business
Analyzing the functional areas of Management
In all types of businesses (big or small), managers play a key role in the efficiency, profitability, and functionality of how the business meets its goals and successes. The purpose of managers are to oversee and coordinate the work of others. As managers, it is important that ensure that the business’ greatest resource, which are its employees, are used effectively. There are several functional areas within business that managers play a role in one way or another. These functional areas are business law, human resource management, leadership, accounting, finance, economics, research and statistics, marketing, operations management, and strategic management.
Each of these functional areas are like a piece of the pie, in where when they are assembled, represent the business as a whole cohesive unit. In business law, the manager ensures that the operations of a business are legally sound and that the business is compliant with any state, federal, or international codes and regulations. Many businesses use the services or products of other businesses, which requires the use of contracts. Managers must have an understanding of contracts to ensure they are current, fair, and meet the needs of the company. Managers also use business law to ensure all intellectual property is safeguarded such as patents. Human resources management is a key function in all businesses because it directly involves the development of personnel within a business. All managers play a role in the life cycle of their employees to include hiring, training, promotion, and disciplinary actions. The role of human resources managers is constantly evolving and many organizations have added the responsibilities of retirement benefits, and payroll accounting to their scope of practices. The leadership of managers involves the way in which managers influence employees to meet the company’s goals. Managers use leadership to motivate and inspire their employees to get the job done, and done well. Managers who are good leaders can to use their leadership skills to handle and resolve conflict that may arise, and solicit cooperation through organizational change.
Management and leadership are skills that go hand in hand. As a manager, one must organize the work of personnel not just to maximize efficiency, but lead them by nurturing skills to develop talent and inspire results (Murray, 2009). Accounting is a critical function in management. Whether a for profit business or nonprofit business, both need and use money to survive and succeed. It is important that managers understand the fiscal competencies within their area of responsibility to be good stewards of the funds or profits they are accountable for. There are two components to accounting financial and managerial. Managers in financial accounting create financial documents, such as balance sheets and income statements through the tracking of expenses and profits within a business. Managers in managerial accounting use these statements created by financial managers to in their decision-making processes to make efficient use of funds and control costs.
Finance is a function of business that concentrates on the fiscal properties of a business, such as revenue, loans, grants, and subsidies. Like accounting, finance is critical to any business if it wants to succeed in a competitive business word. Managers must be able to identify how and when financing is needed to maintain current business operations as well as obtaining new capital or ventures. The function of economics in business provides an avenue of how well a business is doing in the business market locally or globally. Managers use economics to increase profits within their market conditions by studying the consumption, production, and distribution of their service or product. Economics can also provide valuable information to managers when economies become unstable or are experiencing a recession, or when seeking to venture into a new market. Research and statistics are valuable resources for a business. To stay competitive and profitable, businesses continually must conduct research to meet consumer demand. Research is also vital for a business who wants to expand its services or products. The raw data gathered from the research can be interpreted using a variety of statistical methods. The information extracted from the research and statistical data assist managers in deciding what business processes are useful and maintaining goals, and what processes may need to be modified or dismissed.
The manager’s role in operations management is to ensure that the goods or service are getting to the customer efficiently and cost effectively. It is important the supply chain runs effortlessly to meet the customer demand changes. Managers must also be able to anticipate and forecast demand changes in profits to determine when new equipment or facilities are necessary to maintain or increase profits and customer satisfaction. All businesses use some type of marketing tool to grow their business. It can be a million dollar television add or word of mouth from recent customers. In marketing, managers must understand customers who would use their product or service and what would make them happy enough to come back or tell someone else. Through research and statistics, managers can gain insight into how to advertise to their consumer bases and discover what their consumer’s needs are. Marketing can also assist managers of new businesses to develop a brand and image that is eye catching but relevant to the goods or service it provides. Strategic planning is a manager’s planning tool to help implement plans and changes that will help the business achieve its organizational goals. Strategic planning provides a roadmap for managers throughout the organization so that all functional areas though specific in responsibilities, can achieve success to obtaining the strategic goals of the organization.
The link between planning and performance is widely connected because of the ever-changing business climate in globalization, technology advancement, deregulation, and emerging new markets (Meers & Robertson, 2007). Each functional area of business is considered a building block with a specific purpose or specialty that it is accountable for. When those building blocks are formed together, they provide the foundation and structure upon which the business operates as an entity. Managers are the “glue” that bind each of these functional areas into an integrated seamless structure.
Meers, K. A., & Robertson, C. (2007). Strategic planning practices in profitable small firms in the United States. The Business Review, Cambridge, 7(1), 302-307. Retrieved from http://search.proquest.com/docview/197300272?accountid=458 Murray, A. (2009, April 7). What is the difference between management and leadership. Retrieved from