Functional Areas of Business

The activities needed to operate a business can be divided into a number of functional areas: management, operations, marketing, accounting, and finance. Let's briefly explore each of these areas.

Management

Managers are responsible for the work performance of other people. Management involves planning, organizing, staffing, directing, and controlling a company's resources to achieve its goals. Managers plan by setting goals and developing strategies. They organize activities to ensure goals are met, staff the organization with qualified employees, and direct them towards those goals. Managers also design controls to assess success and take corrective action as needed.

Operations

All companies must convert resources (labor, materials, money, information) into goods or services. Some companies, like Apple, create tangible products such as iPhones. Others, like hospitals, provide intangible services like health care. The person responsible for overseeing the transformation process is the operations manager, who ensures high-quality production.

Marketing

Marketing involves identifying customer needs and designing products to meet them. Marketers determine product features, pricing, delivery methods, and promotional strategies. They build relationships with customers and ensure they are satisfied with the products or services provided.

Accounting

Accountants provide financial information to managers. Financial accountants create statements to assess a company’s financial health, while managerial accountants prepare internal reports, such as cost analyses, to aid decision-making.

Finance

Finance focuses on managing funds. Finance managers address key questions: How much money is needed? Where will it come from? How will it be repaid? They also determine how to invest in research, equipment, and other areas to ensure long-term growth and stability.