Functional Areas of a Business Free Essays

A thriving (wholesome) business can be compared to a human who has functional areas taking care of diverse aspects of his body. In business these functional areas group skills and tasks to manage aspects of business that have their own protocol and logic. Business dictionary defines functional areas of business as the grouping of activities or processes on the basis of their need in accomplishing one or more tasks. We will write a custom essay sample on Functional Areas of a Business or any similar topic only for you Order Now It is a necessity and a great benefit for an entrepreneur to have knowledge of these functional areas of a business. This chapter therefore discusses the functional areas of business such as human capital, finance, and marketing as they are basic to all businesses. Others become more essential as the business grows. Management concepts and function will also be reviewed briefly. Basic Management Concepts and Functions Management is a universal phenomenon. It is a very popular and widely used term. All organizations – business, political, cultural or social are involved in management because it is the management which helps and directs the various efforts towards a definite purpose. According to Gautam (2013) many resound authors have defined management in various ways from different points of view some of which are: Harold Koontz—Management is the art of getting things done through others and with formally organised group. F.W. Taylor __ Management is the art of knowing what you want to do and then seeing that they do it in the best and cheapest manner. George R. Terry – Management is a distinct process consisting of planning, organising, actuating and controlling; utilizing in each both science and art, and followed in order to accomplish Pre determined objective. Peter Drucker – Management is a multipurpose organ that manage a business and manages mangers and manages workers and work. M. P. Follet – Management is the art of getting things done through people. Management can also be defined as the effective and efficient use of organisational resources (man, machine and materials) to achieve organizational goals. Functions of Management For any organization to function efficiently, it needs to put in place procedures, methods and plans. This can be achieved when management concepts are implemented. The French engineer Henri Fayol created the first principles of management theory. He defined five functions of management for the management component and these are still seen as relevant to organizations today. These five functions focus on the relationship between personnel and its management and they provide points of reference so that problems can be solved in a creative manner. (Van Vliet, 2011). These functions have been explored as follows: Planning Planning is the guidance of future action (Forester, 1989). Simply put planning is deciding in advance what to do, how, when and who to do it. Planning is the base upon which all other management functions are built therefore it is the primary function of management. Planning involves the establishment of objectives, strategies to achieve the objectives, and a step by step determination of the activities and resources necessary to achieve them. Planning is an unending course of action as it is decision making, since it involves selecting from among alternatives, the best course of action, which seems most likely to bring success or desired result. Planning bridges the gap from where we are to where we want to be. It is therefore futuristic in nature and so it involves prediction. There is always an element of risk in planning because of external factors that are beyond the control of the business but still influences it. Sound planning can reduce risk but cannot eliminate it altogether. Managers must plan for future conditions, develop strategic objectives and secure the achievement of future goals. Therefore, managers must evaluate future contingencies affecting the organization, and shape the future operational and strategic landscape of the company. Organising An organisation can only function well if it is well-organised. This means that there must be sufficient capital, staff and raw materials so that the organization can run smoothly and that it can build a good working structure. Louis Allen (1958) defined organising as the process of identifying and grouping the work to be performed, defining and delegating authority and establishing relations for the purpose of enabling people to work most effectively together in accomplishing objectives. It involves the establishment of an internal structure of roles through the determination of the activities required to achieve the goals of an enterprise and each part of it; the grouping of these activities, the assignment of such groups of activities to a manager, the delegation of authority to carry them out and provision of co-ordination of authority and informational relationships horizontally and vertically in the organisational structure. It is the totality of such activities that constitutes the organizing function. Managers must organize the workforce in an efficient manner and structure and align the activities of the organization. Directing/ Commanding/ Leading Directing is the third function of management. Working under this function helps the management control and supervise the actions of the staff. It also enables them to render assistance to the employees by guiding them in the right direction, to achieve the company’s goals and also accomplish their personal or career goals. Therefore directing is the function of guiding, inspiring, overseeing, and instructing people towards accomplishment of organizational goals. In the words of Newman and Warren (1977) it is activating deals with the steps a manager takes to get sub-ordinates and others to carry out plans. Managers must supervise subordinates in their daily work, and inspire them to achieve company goals. Likewise it is the responsibility of managers to communicate company goals and policies to subordinates. The directing of subordinates should always be consistent with company policies, and every manager should treat subordinates in line with the standards of the company. Controlling After strategies are set and plans are made, management’s primary task is to take steps to ensure that these plans are carried out, or, if conditions warrant, that the plans are modified (Merchant, 1982). Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary. Performance standards are often stated in monetary terms such as revenue, costs, or profits but may also be stated in other terms, such as units produced, number of defective products, or levels of quality or customer service. Effective controlling requires the existence of plans, since planning provides the necessary performance standards or objectives. Controlling is therefore a tool for measuring progress. It is therefore the responsibility of managers to ensure that company activities are in line with general company policies and objectives. Also to observe and report deviations from plans and objectives, and to make initiatives to correct potential deviations. Coordinating The organization will function better when all actions are harmonized. Coordination aims at galvanizing discipline and motivation within the group dynamics, which necessitates good leadership and clear communication. In simple words, coordinating is all about ensuring everything works well together. It is having the right resources at the right time and right place. They coordinate team actions and procedures so that the objectives are achieved in an efficient and effective manner. In a business enterprise with people working at various levels performing various activities, it becomes crucial to synchronize work at every level and in the organization as a whole. It is therefore the duty of the manager to harmonize the procedures and activities performed by the workers, meaning that every activity of each organizational unit should complement and enrich the work of another. It is interesting to note that there is no hard and fast rule to be followed in the application of these functions, as management is a real-time decision-making system, any of these functions can be operational in conjunction with any other and also as independent entities themselves. How to cite Functional Areas of a Business, Papers