Functional Areas of Tesco

Unit 1 – Investigating Business. Myles Howson. 11G.

Section B.

In this section I am required to give ‘a thorough account of the purposes and activities of ONE organisation’s functional areas. A detailed analysis of how the main types of internal and external communications used supports the work of these functional areas’. I have chosen Tesco as the company that I am going to apply this section to.

Functional areas inside a business are sometimes thought of as internal structure. They are important to keep the business running smoothly.

There are many different functional areas in a business.

In a large organisation, people work together in functional areas. These areas undertake key functions which must be carried out within the business. Each has a specific purpose. Below are the functional areas within Tesco:

Human Resource Department.

Human Resource Services – relates to people who work for Tesco. One would drop a line to the human resources department of Tesco if you were applying for a job there.

The purpose of human resources – Tesco need to recruit people to carry out important activities. Employees are a type of resource.

The purpose of human resources is to find employees that are needed by Tesco and then once they are employed try and meet their needs. Human resources are involved in the following areas:

Recruitment, retention and dismissal. Human resources aims to hire good high quality staff and maintain them. Also if a member of staff have to be dismissed human resources will take care of this and make sure that it is done 100% legally.
Working conditions. High quality staff will be more attracted to a company with high quality working conditions compared to ones with poor working conditions.
Training, development and promotion. This is a key area to business because most staff wants to improve their career prospect.
Employee organisations and unions. Most staff likes to have a say in new developments and major changes in a company. They also need advice if they have a serious problem.
Health and safety. All employees have the right to work in a secure and safe environment. The human resource department must make sure that the company complies with all the health and safety laws.

The finance function.

The finance department keeps a track on all the money that is made or spent by Tesco and they know exactly how much loss or profit they make/ loose on each item or service sold. Most business people think that the finance department is the most important of all the functional areas. Financial information enables Tesco to make critical rapid decisions to be made to a Tesco that can be the difference between financial success and failure.

Tesco control there finances through a system called the budget system. Each manager or department in Tesco is given a budget which identifies planned income and spending. The finance department regularly checks that managers and departments are on target with their budgets and they investigate the situation if they are not.

The use of Information Technology and computers has revolutionised financial operations. Spreadsheets and databases are used to analyse Tesco’s income and expenditure. Tesco use special accounting software and management information systems – often know as MIS. The benefit of revolutionised technology is that the software provides the finance department with more accurate in depth financial information more quickly. This may help Tesco to meet their aims and objectives.

The finance function is also important to Tesco because through this function the wages and salaries are paid. All employees from all different job roles have the right to be paid and receive pay statements of how much they were paid and when.

Another responsibility of the finance function is to prepare the accounts, which for Tesco is a legal requirement. (Probably so money laundering is reduced and to work out how much tax Tesco has to pay.) Tesco has to calculate its profit no matter how big or small it is because the Inland Revenue needs to calculate how much tax they are to pay. Expenses should be accurately produced because this can reduce the amount of tax they are to pay. Also Tesco are registered for value added tax (VAT) also has to submit vat returns time. If they don’t do this they are fined.

Finally Tesco may need to obtain additional capital so they can buy new equipment, stock, premises or another company.

The administration and ICT support function.

If you think of Tesco as a big car then imagine administration and ICT as the fuel that keeps it running smoothly. Without the administration and ICT support function the car would grind to a halt because the administration and ICT support function provide the vital support services that are needed for Tesco to keep running in the most effective way.

Traditionally, administration was often centralised in its own separate section of the Tesco. Today, it is decentralised with administrators working in every department. This provides more flexibility and is mainly due to new network systems being introduced which has now improved communication and sharing information between departments.

Administration and support normally have responsibility for the following areas:

Clerical work – includes the collection and distribution of mail, record keeping, organising meetings and responding to equerries.
Cleaning and maintenance – This is undertaken by specially skilled staff that could be supervised by an administration or estates manager.
Health and Safety – This involves all employees but with the responsibility of administration in areas such as the usage of it equipment and electrical equipment.
Security – it may involve day-to-day support for security staff.

The Operations Function.

Tesco just simply have to have resources. These include buildings, land, people, equipment and materials. Operations are responsible for:

Obtaining the resources needed to be able to make the products and provide the services offered Tesco.
Organising the resources that were obtained so that they are used in the most efficient and appropriate way so that Tesco can achieve its aims and objectives.

If you think of it like this, if Tesco had no stock then they wouldn’t really exist. . . Or would they?

The Marketing and sales function.

Peter Drucker once described marketing as “Looking at the business through the customer’s eyes”. I cannot think of any way better to describe marketing. It’s basically finding out what the needs of the customers are and then providing it.

Tesco do not class marketing as a function of its own. They describe it as ‘A fundamental to the way the business operates’. This ...