How do the main functional areas of a business interact and contribute to its effective management?

Topics: Human resources, Marketing, Management Pages: 5 (1656 words) Published: November 13, 2002
'How do the main functional areas of a business interact and contribute to its effective management?'

The main functional areas of a business are marketing, human resource, finance, information systems and production. All these interact with each other in different ways but all contribute to effective management. Management would not be completely effective if one of the above areas are missing. They are all needed in different ways to make sure that the business reaches objectives, achieves effectiveness and efficiency and while doing this trying to get a balance in which they can satisfy different stakeholders.

One of the most important functional areas of a business is marketing. Marketing provides the organization with information, which allows the organization to make decisions on the demands of the consumers, changes in the market as well as any strategies of competitors. This contributes to effective management because it allows the business to make sure that they provide the right product or service to consumers. This is very important for management because if the business does get this wrong then the survival of the business is under threat. To make sure that the business provides the right good or service, the marketing manager has to gather all the relevant information and distribute it to other areas in a way that will benefit the organization as a whole. Information can be used to help management plan their objectives and strategy's, which can be very effective for the business.

Marketing interacts with functional areas through the planning process. Businesses need to plan for the future and the marketing plan is part of this. The marketing plan shows the current situation of the business and where it wants to be in the future. This helps set the objectives and plan how these objectives will be achieved. It helps the business set targets and then evaluates the results to make sure that the business is performing efficiently and effectively.

The information that is gathered by the marketing department needs to provide other areas with this knowledge. A production department would find the information from marketing very useful because they need to make sure that they are making a product that will satisfy the consumers wants and needs. This interaction contributes to effective management because if the production department didn't interact then the wrong products could be produced, which would be very costly for the business.

Marketing also interacts with the finance department, which allows the business to perform effectively. Finance will need to know information from marketing to make sure the business had sufficient capital in order to finance any materials or equipment for new products etc.

Marketing doesn't always contribute to effect management. If the business lose sight on which consumer group they are satisfying or changes in demand then this could lead to decrease in sales.

Management of a business would find it hard to function effectively without the human resource department. Krulis-Randa believed that human resource management (HRM) was beneficial for a business because ' employees are viewed as subjects with the potential for growth and development' and human resource management 'identifies this potential and develops it in line with adaptive needs of the organization'. HRM contributes to effective management because it ensures that the businesses human resources i.e. employees are used efficiently by using there ability, knowledge and skills to the full which will benefit the organization.

Human resource department interacts with finance because they need to know how much capital there is when considering how much staff they will need and what training programmes they can implement. A business will use human resource planning (HRP) to make sure that the business employees the right people and it also allows them to predict how many employees they will need to be able to...
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