How Business Functions Interact (OCR GCSE Business)

Revision Note

Written by: Lisa Eades

Reviewed by: Steve Vorster

Functional areas are departments which carry out a range of specialist business tasks
- Common business functions include finance, marketing, operations and human resources
Although each functional area has focused responsibilities, they are usually interdependent, relying upon and working with each other to achieve shared business goals

Lumley Foods Ltd is a grower and packer of fruit, grains and vegetables, located near Ashford in Kent
It counts major UK supermarkets and food manufacturers as its customers
The business has grown significantly in recent years, building new processing facilities and recruiting extra staff to meet increased demand
As a result, the business has undergone a significant reorganisation, introducing functional areas
- This has allowed it to more effectively manage the variety of tasks that need to be completed to remain competitive

Lumley Foods Ltd's Functional Areas

Human resources	Operations
Lumley Foods Ltd's small HR function is led by an experienced manager, who takes on the key roles of workforce planning, recruitment and selection Two assistants manage the monthly payroll processes and HR administration, such as training and performance monitoring	The largest functional area is led by the operations manager It is divided into production, packing, purchasing and logistics departments Production and packing departments share quality controllers Other staff are assigned to specific departmental roles, each headed by a supervisor or manager
Marketing	Finance
The small marketing function is led by a manager, whose role has recently expanded to include conducting market research The sales representatives' key tasks involve seeking new outlets for Lumley Foods' products and building relationships with major supermarket buyers	A finance manager leads the finance function, reporting on business performance, managing budgets, and ensuring the business has sufficient funds to continue growing Her two assistants manage payments to suppliers and collect money owed from customers

Although functional areas allow specialist tasks to be allocated across the organisation, Lumley Foods Ltd benefits from the close collaboration between functional areas
They frequently work together to achieve shared objectives

Lumley Foods' human resource function supports operations by managing the recruitment and training of production workers
The operations function ensures that workers' performance data is provided to the human resource function to support the annual appraisal process

Lumley Foods' marketing function uses market research, including feedback from major supermarkets, to inform the finance department on the prices to be charged to customers
The finance function sets and oversees marketing budgets, ensuring that the marketing function does not overspend on promotional activity

Lumley Foods' marketing function carries out market research into customer needs and wants
- This informs the operations function's decisions on the preparation and packaging of food
The operations function ensures that the quality of products meet customer expectations, supporting the marketing function to provide accurate promotional messages to customers

Lumley Foods' finance function manages the payment of wages and salaries to production workers, and oversees the training budget
The human resources function recruits skilled employees to work in picking, packing, quality and logistics

Last updated: 9 August 2024

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