Functional areas of a company – Define Business Terms

The functional areas of a company are all the departments in which a company is divided so that it can work efficiently.

It is important to consider that each area or department develops specific functions. Since each one has a set of workers who carry out activities that are similar and respond to specific needs within the organization.

It should be noted that each department helps the company achieve its objectives and goals. Typically, a company has at least five functional areas. Among them we find the area of ​​management, human resources, production, finance and marketing.

Of course, as companies grow, their internal structure also increases. In other words, the number of departments that must operate in a coordinated manner to meet the organization’s policies and objectives is growing.

Main functional areas of a company

The main functional areas of a company are:

1. Address

Above all, the management area is related to the process of the general operation of the company. In it the objectives are defined, the most important decisions are made and from there all the operations of the organization are directed. Since it is responsible for ensuring that everything works well, it is directly related to all other areas and controls them.

2. Human resources

For its part, the human resources area is in charge of the search, selection and recruitment processes of the personnel that the company needs to fill the jobs. In other words, it has to do with everything related to the hiring and remuneration of the staff.

Additionally, it has to do with everything that concerns administrative tasks, internal communication, training and legal aspects of the personnel in charge.

3. Production

Naturally, in this area the production process of the goods and services that the company sells is developed. Specifically, it is the functional area where raw materials are transformed into finished products.

He is responsible for ensuring that the optimal use of resources is made in the production process. It also controls that what is produced meets the expected quality conditions. For this, the best inputs must be selected and in the required quantities, choosing the best suppliers.

4. Finance or accounting

Now, finance is in charge of keeping the accounting record of all the operations carried out by the company. He is in charge of all the money movements that occur inside and outside the company. In other words, this area is responsible for the monetary and financial resources that the company owns.

He is in charge of the payment of employees and suppliers, he must make financial reports and accounts; without forgetting the payment of taxes. In addition, he makes investment decisions for the company, considering what to invest in and looking for the best time to do so.

5. Marketing and sales

While, the functions of the marketing department are oriented outside the company. In this area, the marketing strategies to be applied and the market or market segment to which it is directed are defined.

Of course, for this, the planning and design of the new products is carried out and the life cycle of the products that the company sells is established. Seeks that marketing objectives are achieved through effective communication and customer acquisition.

He is also in charge of planning the marketing mix in terms of product, price, communication and distribution. It does this based on the different goods and services that the company offers to the market.

Functional areas of a company

Other areas that may work in larger companies

Depending on the size of each company, some have other departments such as the following:

• Innovation: In this area, new product ideas originate, as well as improvements in both production and marketing practices and processes.
• Technology: This department develops the hardware and software that provide the technical support that will be used for data and information management. Helps production and marketing processes become more efficient.
• Customer service : It seeks to better serve and serve the company’s customers, in order to maintain customer loyalty. Giving rapid response to customer requirements such as claims, complaints, concerns, among some that we can mention.

Functional areas of a company
Other areas

Finally, we are going to say that most companies have five functional areas such as management, human resources, production, finance and marketing. But, depending on the size, they could implement other functional areas that better respond to the particular needs of each organization. The important thing is that each area works in a coordinated manner to achieve the proposed objectives and goals.