More About Functional Departments

The advantages of functional departments are:
· Resources are better used
- all the filing will take place in one area
- there are less chance of files going missing
- filing cabinets and storage will not have to be kept all over the building.

· There are greater skills and expertise
- For example, staff working in Administration will become expert in maintaining filing systems.

· Career paths are created
-
For example, once you have developed expertise in one of the departments it is easier to obtain promotion in that area.

· Communication and cooperation within the department are excellent
- all the people within the department work together and know each other well

· Team work improves
- Working together means that staff have a feeling of all being in it together” and they are motivated to work harder for each other for the department. This improves their abilities to solve problems.

The disadvantages of functional departments are:
· Rivalry between departments
- This can lead to staff seeing other departments as rivals and competitors rather than fellow workers. This can lead to in-fighting which causes time wasting and inefficency.

· Barriers to communication between departments
- Although there may be excellent communication between the departments within departments, it is often only the managers of different departments who have formal contact with each other.
This means that communication between departments can be slow, which means decision making for the whole organisation is less effective and more time-consuming than it should be.

· Departments still have to work together- Many day-to-day problems will need the attention of more than one department. It may be difficult to identify who has overall responsibility.

Functional Areas

Businesses are commonly organised around the functional areas which are ;

Human resources
Marketing
Finance
Operations
Administration

Marketing-

It is the responsibly of the marketing department to firstly identify what consumers want. This is done using market research.
The department then decides upon the correct marketing mix for the organisation. The marketing mix is made up of the ‘Four Ps’

Human resources

The human resource department manages the staffing of the business. It organises recruitment, staff training and appraisal, and is concerned with staff welfare.
Staff have to be experts in employment law, making sure that the business meets all the legal requirements they have for there employees.

Finance
The finance department is responsible for keeping all the financial records of the business; control of money flowing in and out of the organisation; and making sure that the business can pay its debts to keep on trading.
The department provides senior management with the information needed to make decisions, by forecasting the financial outcome of different courses of action, and preparing budgets.

Operations
Operations is concerned with the purchase and storage of raw materials; the actual production of the end product and the storage and distribution of the finished goods.

Administration
Administration is responsible for the flow of information around the business. The department is also concerned with keeping records of what the business does.

Research and development
The size of this department really depends on the type of business. The department is constantly looking for ways to produce new products or improve existing products.
If the business is producing pencils, then there would not be much need for research and development. On the other hand ; if it was a business that produces medicine, a lot of time and effort would be spent on research and development.

Flat Structure

In flat structure there are fewer levels of management. Due to this smaller organisation tend to have few levels.

And also with a flat structure there are fewer problems with communication, decision making and to changes
In the market.

A typical small printing business may be organising like this:
























The owner has overall control of the business, but also knows all the people that work for him/her. The owner will see and speak to all the staff on a daily basis, so communication between the top and bottom of the organisation is very quick.


Consultation will also be quick and efficient as the owner and manager can easily meet all the staff face to face to discuss any problems that may arise.

This teamwork will allow the business to respond to changes in the market very quickly, and so the business will have a mush better chance of surviving and being profitable.

Hello
We are 5b we are from Lenzie Academy today in class we were told to make summary notes on Internal Organisation of a business. We were all given different topics under Internal Organisation and this is our work!!