How Business Functions Interact (OCR GCSE Business)
Revision Note
Written by: Lisa Eades
Reviewed by: Steve Vorster
The Interdependence of Business Functions
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
Case Study
Lumley Foods Ltd
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 |
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Marketing | Finance |
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Interdependence of the functional areas
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
Human resources and operations
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
Marketing and finance
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
Operations and marketing
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
Finance and human resources
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
The benefits of interdependence
Effective collaboration between its functional areas has improved Lumley Foods' decision-making, increased its efficiency and helped it become more competitive
Its day-to-day activities are coordinated, ensuring everyone is moving in the same direction
There is better communication and information sharing across the business
This ensures that everyone has the necessary information to make informed decisions and avoid costly mistakes
Problems are tackled by considering different perspectives, leading to better solutions
Functional areas share resources, such as staff
E.g. The Packing and Picking departments share quality control staff
Employees experience different perspectives and varied ways of working, which increases their engagement with the business
Staff turnover has remained low since the reorganisation of the business structure
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