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You are here: Home / Business and Strategy / How are business functions interrelated?

How are business functions interrelated?

Updated on August 11, 2023 by Ahmad Nasrudin

How are business functions interrelated

Business functions are interrelated to achieve company success. They cannot work alone. Synergy and close communication between them are needed to achieve company targets. Indeed, each function has its own goals and targets, but it must support the company’s goals as a whole.

Most businesses have four main functions: marketing, operations, accounting and finance, and human resources. We may refer to them as departments or divisions. Each department is managed by individuals with specific skills and qualifications in the functional area of work.

Actually, the department in a company does not only consist of these four categories. You may also hear of various departments such as logistics, information technology, procurement, business, and development, etc. But, for the discussion in this article, I only focus on the four.

Marketing

The marketing department is responsible for satisfying customer needs, creating value, and maintaining long-term relationships. That way, they are satisfied with the company’s offerings and loyal, willing to continue buying products. As a result, they will continue to pour money into the company.

The marketing department must work with other business functions such as finance, operations, and human resources to be successful, including to:

  • Ensure to have competent people to support and implement marketing programs and strategies.
  • Recruit new staff to support new programs being implemented, such as research and development.
  • Ensure adequate inventory when needed by consumers and will be marketed.
  • Maintain customer loyalty by ensuring products meet specifications and are not defective.
  • Set the right selling price, which requires information such as production costs.
  • Have an adequate budget to run marketing programs such as promotions and developing distribution channels.
  • Design a discount program for customers who pay on time, encouraging them to remain loyal to the company.

Finance

The finance department deals with corporate money, including managing cash inflows and outflows, reporting and analyzing them. Adequate finance is essential because other business functions require financial support to operate effectively. It’s like the blood in our bodies.

The finance department needs the support of other business functions to:

  • Have staff with adequate accounting, finance, and related skills.
  • Ensure budget allocation according to plans, such as training and development budget, promotion, and daily expenses.
  • Monitor the progress of budget absorption in each department.
  • Determine the financing strategy when the operations department plans to purchase capital goods or launch an investment project.
  • Ensure the company is making a profit, which requires information such as sales targets by the marketing department.

Human Resources

The human resources department is strategic for the entire business. Other business functions require individuals to carry out daily activities. How good are these individuals? That’s where human resource management comes into play.

The human resources department synergizes with the marketing, operations, and finance departments, including to:

  • Ensuring they have adequate resources, not too many to increase costs or not too few to disrupt business processes.
  • Organize training and development and develop individuals in each department to become professionals in functional areas.
  • Handles disciplinary issues and employee complaints across all departments of the business.
  • Ensure compliance with labor regulations such as labor health and safety laws.

Operation

The operations department is responsible for ensuring adequate inventory is available for production, production processes work efficiently, and output quality is within specifications. The operations department needs support from other departments in planning and carrying out day-to-day activities, including:

  • Sales forecast to prepare production schedules, determine how much output to produce, and ensure the supply chain runs effectively.
  • New products to be produced and their specifications to determine the appropriate production methods and quality control.
  • Budget for running day-to-day operations and for business expansion, for example, buying new machines.
  • Staff, for example, when they need new people to support increased production.
  • Termination programs, for example, when switching to new technology with a smaller workforce, to remain compliant with relevant labor laws.
  • Break-even information to set production targets.
  • Operations Department: Roles and Relationships With Other Business Functions
  • Accounting and Finance Department: Roles and Links with Other Departments
  • Organizational Structure by Function: Advantages and Disadvantages
  • What are Core and Supporting Business Functions +Examples
  • Business Function: Definition, Importance, and Types
  • Human Resources Department: Roles and How it Works
  • Marketing department: Functions and Responsibilities

Topic: Business Function Category: Business and Strategy

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