Administration and IT support
Administration and IT support are concerned with clerical work, such as mail and record keeping, health and safety, security, cleaning and maintenance and provide support for software applications, electronic communications and electronic transactions. For example, if a person within the business accidentally downloads a virus, then admin and ICT will need to know and they will then be able to sort out the problem. If something like this goes unchecked for too long then there is a chance that the virus could spread and then the whole network could fail. This could mean major problems for the business. IT is used in businesses in many ways. Such as:
- To Store information about products on databases
- To make calculations such as working out the profit using spreadsheets.
- To provide advertising using computer graphics packages.
- To process information and other document's using word processing programs
- To communicate internally by fax, e-mail and other methods using ICT
- To create presentations
- To create websites to promote the business and provide information about the business.
It is very useful within businesses as it saves time. For example when trying to find a document, if it was on paper and not a computer then a person may need to spend a lot of time searching through piles of paper just to find one document.
Marketing and sales
Marketing and sales are concerned with customer needs. They do market research, promotion and sales. So they have to research into what customers want such as if a customer wants a futuristic computer screen and power pack then marketing and sales would have to see whether such a computer had been created yet, and if not then talk to someone about creating one. They are also responsible for promoting new products and making people want to buy them. They have to differentiate the product to make it more attractive to customers, they have to skim, maximise, premium price, penetrate, capture & distribute and they have to analyse the product lifecycles. Marketing and sales use the SWOT analysis to analyse the existing position. This presents the:
Strengths
Weaknesses
Market Opportunities
External Threats
The market can be segmented so that businesses can concentrate on one segment only. There is a big difference between marketing and sales as marketing is where you are trying to get the best products for your customers whereas sales is where you are trying to convince your customer that you already have the best products and where you are selling these products. Marketing the segment can help the marketing department understand its market better. Sales people have to convince their customers that the product that they are selling is the best around. The marketing department of, for example Cadbury’s, may carry out research to find out what flavour chocolate is most desired among their customers. They will ask customers which products they would like to be improved and which products they would like to see developed. E.g. Cadbury’s shortcake biscuit chocolate could be improved to make them crunchier and a new product with orange chocolate in it could be developed. Market research can be carried out by using primary or secondary research methods, or both. Primary research is where data and information is collected first hand. This ensures that the information is original and up-to-date. However, this can be time consuming and costly. Secondary research is where data and information that already exists is used. This data is usually free, and easily available. When a business has market research, they will decide the “marketing mix” for the product or service. The marketing mix, consists of product, price, promotion and place. Also known as the 4Ps. Businesses must decide what the product or service should be, including whether it needs to be packaged, what the customer wants and whether an after sales package is required. They must decide how much the product should cost. Where the product or service is promoted is also important, as-well as how it is promoted. Where the product is sold is also an issue, the product must be in a suitable location which is also easy to get transportation to. The use of the 4Ps can increase sales, if used well and correctly. It is likely that all marketing mixes will be slightly different and many factors can influence this. The product and customers are just two of these factors. Sales staff may be employed by businesses which will not only rely on promotion and advertising, to sell the product or service. Sales staff are employed to make contact with potential customers and try to sell products.
Human resources
Human resources are concerned with health and safety, recruitment, retention, dismissal, working conditions, training, development and promotion, employee organisation and union. This includes legal rights and responsibilities of employer and employees. So they have to hire and fire staff, make sure that staffs are happy and retained and make sure that their working conditions are satisfactory. They are in charge of training new staff and developing their skills and promoting able staff and responsible for managing all of the people who work within the business. If legal action is taken in the name of an employee, then human resources are also responsible for that along with organising employee unions so that workers can have their say. The human resources department can also be called personnel. Human resources are in charge or recruitment and have to ensure that vacancies are filled to the best o their ability, the best and most able workers are employed this means that human resources has recruitment procedures for trained staff to follow in order to recruit the most appropriate workers. Human resources are also in charge of retention which means that they are in charge of keeping staff, if they do not retain good staff then they will have to hire and train another person, this takes time and money and so it is very important that human resources keeps employees happy. Human resources are also in charge of dismissal; this means that they are in charge of monitoring workers and dismissing the ones, which are not working efficiently. Businesses usually provide an induction programme fair terms and conditions of employment, good working conditions and appraisal interviews in which employees can talk “to their managers about their performance and future prospects”. Human resources also need to ensure that physical working conditions are to a standard, which workers accept. If there is a problem with their environment and the workers are not happy, then it is likely that they will not be working to the best of their ability. Working conditions also relate to job content, which means what the job includes, promotion prospects, training opportunities and welfare policies, which include loans and medical checks. Working conditions must be maintained otherwise workers will become unhappy, which could cost the company a lot of money, especially if lots of workers decide to leave the business. Human resources also need to ensure that workers are trained suitably for their jobs. The human resources department may have a training officer or a training section. Human resources will have to keep staff training records, monitor the training budget and as the GCSE Applied Business FOR OCR book tells us, they will be responsible for “overseeing the procedures for applying for training”. Some workers may wish to develop their skills, this is usually called ‘staff development’ as opposed to ‘staff training’ because the staff are not learning new skills but developing their present skills. Companies may pay for activities that assist staff development and these may be run in the workplace. Staff may be keen to improve their abilities and skills because this may lead to a promotion and better job prospects. Human resources will also oversee promotion prospects, and will decide whether or not a worker is good enough or a promotion. Human resources will also be associated with trade unions and employee organisations. The GCSE Applied Business FOR OCR book tells us that senior members of human resources may have to “negotiate with trade unions on behalf of management.” Human resources often have to supply information on health and safety issues, and ensure that the Health and Safety at Work Act is being followed and used correctly.
Research and development
Research and development are concerned with developing new goods and services and updating old ones. If a person comes up with a new and good idea then research and development are in charge of making sure that that idea is looked into. If scientific or technological developments occur then there may be new products developed. A change in ‘customer buying behaviour’ can also cause this to happen. So if marketing and sales come to them with a customers query about futuristic computers then they become in charge of that. Research and development have to work with designers to design and produce good quality and good value for money products to entice customers. Research and development use many different methods of research to find out what customers or potential customers want. They may do surveys, questionnaires, and Internet research and could obtain either primary or secondary research. A lot of the time it will be of more use to the company to obtain primary research as then the company will know how up to date the research is. The company will also know, with more certainty, that the research is reliable.
Finance
Finance are concerned with money and future plans, preparing accounts, such as invoices, management accounts, financial accounts for shareholders and inland revenue. They are also concerned with preparing wages and salaries, obtaining capital and resources, such as money for expansion and to pay for resources such as equipment and materials. Finance is sometimes considered as the most important functional area within a business. Finance is needed at all points in a businesses life as when they are starting up they will need to buy assets. When they are “up and running” they will need finance to determine that they are breaking even, this is to say that they must ensure that the money coming in (the input) is matching the money going out (the output). It is important that businesses break even otherwise they will make a loss and can even go into debt. Finance is also important for growing businesses, as they will need to buy more assets and either break-even or make a profit. This will cause them to expand and grow.
Operations
Operations are concerned with the main business activities. They obtain and convert resources of the business into goods or services. They make decisions such as what to do with land, buildings, material, and jobs for workers and buying new equipment. In a company such as Argos operations would include processing a persons order; however in a company such as Gillette, operations might include making a batch of razors.
The use of IT
The use of IT relates to all functional areas because of:
- Electronic communications e.g. Email
- Data Sharing e.g. Databases
- Security systems e.g. virus protections
- External communications e.g. Internet
- Online support for customers e.g. Order tracking
- Electronic Transactions e.g. EFT
Functional variations
No two businesses are the same. Functions will vary because of the:
- Size and scale of the business
- Activities of the business
- Types of customers
- Needs of customers
- Preferences of owners