Functional Areas Report

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Functional Areas and Communication





In this report I will outline the work of the different functional areas at Tesco. To begin with I will explain the term ‘functional area’. A functional area is a specific part of a business that deals with certain activities, roles and responsibilities within that company. For instance for Tesco, their functional area is that they (Tesco) are split up into departments to carry out a range of tasks or responsibilities to support their activities (business) for example Finance or Human Resources.

The reason that this is a better term than the term ‘department’ is because in some businesses specific departments do not exist but there still has to be someone performing the function. An example of this is a small sole trader business. Small sole trader businesses do not have functional areas. This is because the owner of the business will be in charge of the business and will be responsible of everything, for instance they would be responsible for recruiting people to work in the business and therefore they would perform the function of Human Resources. They might also be responsible for producing the accounts of the company and therefore they would also be performing the function of finance.

Tesco has many different functional areas, all of which are in charge of certain tasks or functions. The specific functions I will outline in this task are:

  • Human resources
  • Finance
  • Administration and IT support
  • Operations
  • Marketing and Sales
  • Customer Service
  • Research and Development

Human resources

At human resources, they are responsible for recruitment, retention and dismissal. Tesco’s Human resources department is responsible for the workers and to make sure they have good working conditions, health and safety, employee organisations and unions and training, development and promotion. At Tesco, this area of the business is responsible for recruiting employees as pointed before. Tesco have a Head Office that is accountable for appointing area managers and other senior people in the business.  However, the recruitment of people to each individual store would usually be done by the store manager or PA manager.  Each individual store does not have a Human Resources department, but the manager performs this occupation.  Christmas is an example of a hectic time of year when Tesco will recruit more workers into the organisation to deal with the increase in customer numbers.

Another job which relates to the Human Resources function is retaining good staff. Tesco do not want good staff to depart because they are a plus point to the business and also Tesco will have used up a lot of time and money getting the employee to this benchmark. Tesco will not want this employee to leave and join one of their competitors such as Asda. To ensure that staff can be retained, Tesco will have in place progression opportunities for employees to move up the pay scale and opportunities for people to apply for more superior positions within the business through advertising promotion opportunities internally.  

Sadly the people performing the Human Resources function at Tesco also have to dismiss (give notice to) people. There are a number of reasons why business might dismiss someone. This might be when they have done something wrong or when they are no longer needed because they business does not have enough customers. This is often referred to as redundancy.  If an employee at Tesco stole something, they would probably be dismissed straight away, but if it was arriving late to work they would probably receive a number of warnings before being sacked.  Because Tesco is a successful and profitable business, it is unlikely to make people redundant.  

The Human Resources area of Tesco is also responsible for looking at the working conditions of employees. This includes making certain that employees get the right number of breaks, have a safe working environment, a place to rest during their breaks and holidays. Working conditions also extends to health and safety. Human Resources will be responsible for making sure that employees are protected and logging any accidents that occur so that they can prevent this from happening again.  

The Human Resources people at Tesco are also responsible for training.  They have to make sure that new employees are able to access the training that they need to do their job and that existing employees are kept up-to-date.  An example of this at Tesco is when new technology is introduced, for example new tills or self service areas. In order to their job properly, Human Resources will be responsible for making sure that the right people get this training.  

Employees at Tesco have the right to be members of a Trade Union. A union is an organisation that represents the interests of employees in the work place. The employees at Tesco are likely to be members of USDAW (Union of Shop Distributive and Applied Workers). It is the responsibility of the Human Resources to negotiate with Trade Unions. An example of this is if the employees at Tesco want a pay rise and demand this through the union, the Human Resources department within the Tesco Head Office would be in charge for discussing this with the union and avoiding possible industrial action such as strikes.


The finances of Tesco are observed centrally through Tesco’s Head Office. The finance department manage all the money coming in and out of the business. Each individual store has their sales figures monitored electronically. It is then the responsibility of the Finance people at the Head Office to set each individual store targets and re-examine these. This information will then be used to practise the accounts of the company. This will consist of balance sheets and profit/loss accounts. As Tesco is a Public Limited Company all of this information has to be published to shareholders and the public.

The finance department also deal with preparing accounts and paying wages and salaries. Business need to understand this information so they can plan what to do next. The financial department also deals with other payments, and may also work with other departments within the business. In small business the owner might look after the financial records. Usually firms pay someone to look after their accounts. In larger business the firm might have full-time staff looking after the finances. Also if the firm is large enough it will employ people to work within the business.  

As Tesco is such a large organisation they’ll employ three types of accountants, these are: financial accountants, cost accountants and management accountants:

  • Financial accountants – usually only larger organisations have financial accountants. The financial accountant has to keep record of how much the business spends and how this has affected the profits of the business. He or she has to produce regular reports showing how the company’s money has been spent and what income has been received. This information is vital a sit helps the managers plan future activity. The financial accountants prepare the profit and loss accounts and balance sheets.
  • Cost accountants – the cost accountant calculates the costs of the business services and products. By showing which parts of the organisation are efficient the accountant may contribute to haw the business is organised. The accountant is able to show which products are most profitable, this helps the manager decide on what to decide. Their cost accountants may work closely with other departments to make sure that costs are measured as accurately as possible. Cost accountants help managers make decisions about the most efficient ways of running the firm.
  • Management accountants – the Management accountant deals with the actual income and expenditure of each of the businesses activities. Departments may be given money to perform their various tasks and are set targets on how much they have to earn, this is a budget. The Management Account advises managers about how well the various departments are meeting their budget. This allows them to made decisions before, for example, a department spends too much.  

It is important for Tesco to have a large finance department because it is a big company that has a lot of capital income. If they had a small department they won’t be able to keep record of all the income.

Administration and IT support

Administration and IT support cover a range of tasks such as:

  • Clerical work (collecting and distributing mail, keeping records, organising meetings and responding to enquiries)
  • Cleaning and maintenance
  • Health and safety
  • Security
  • Support for software applications (word processing, payroll, accounts, databases, etc), electronic communications and electric transaction.

Most business gets mail in 2 ways direct delivery and private delivery.

Direct delivery is the most common way to deliver post direct to the firms business address. In larger business, like Tesco the delivery will be to the firm’s reception desk. The disadvantage is that work cannot be done until the post has been delivered.

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Private box is when a business can rent a box at a local post office. Each box has a number on it that is part of the firms address. The post is kept there until it is collected by the businesses representative. The representative can arrange a time to pick up the post. Filing is the most common way to store paper. It can be stored in different orders, Alphabetical, chronological and geographical.

  • Alphabetical – is in order of the alphabet.
  • Chronological – is in order of date and time.
  • Geographical – is when the ...

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