Give a Definition of a Functional Area

Give a definition of a functional area

Grouping of individuals on the basis of the function each performs in the organization, such as accounting, marketing, manufacturing.

Describe the different functional areas that can exist within a business

Several Functional Areas exist within a business. These vary depending on the business. So in a business there are several departments, each of these departments is a Functional Area, so there would be Functional Areas such as: Marketing, Accounting, Repairs, Complaints, Finance and I.T etc…

Give 2 examples of functional areas and explain how they help a business to achieve their aims.

One main functional area in a business is marketing. This specific functional area works on promoting and selling products or services, including market research and advertising. So they only focus on this specific task, this means other people working for the business can focus on other specific functional areas. Having a marketing functional area is key because marketing is a big part of every business so by having a certain person / certain group only focusing on that you are decreasing the amount of work other people would have to do on that. It means that the target market can be a focus for the business so that sales can be maximised and this means that the profit can be higher for the business as it is more effective in its marketing. Sales and profits are main aims for a business.

Another Functional Area that is required is a complaints department, they deal with all the criticisms the business has received and their main aim is to make sure the customer who made the complaint is happy with the business. This functional area is required because it deals with an area of the business that is quite large. Every business receives complaints, no matter how big or small. But by allocating roles to employees on which department they should focus on they are making the business more organised and this improves customer service, this means that if customers are being dealt with efficiently, then they are likely to use the business again and that means more repeat business for the company. The more repeat business the more established the business will become and this will give them more market share, another aim for a business.

Think of it like this, a business has 100 employees and there are 10 functional areas. Each functional area has 10 employees working on it. This is very smooth flowing and all the work necessary gets done. It is much more organised than having no functional areas and every single employee working on different things every day. There can be greater specialisation in the business and this makes the business more efficient.