Relationship between different organisational functions
This article aims to explore the relationship between different organisational functions. It also aims to examine how they link to organisational objectives and structures. The organisational functions refer to a set of activities that support the main tasks of an organisation and its overall goals. These functions help organisations in supporting their business processes and decision making. This article identifies the key organisational functions first, and then examine their relationship with each other.
HR (Human Resource)
HR is the function that is concerned with people who are an integral part of an organisation. It is a business function that is dedicated to attracting, engaging, and retaining employees. The HR department in an organisation is entrusted with various responsibilities. Some of these include hiring new employees, conducting performance reviews, providing employee training, managing employee benefits, ensuring compliance with government regulations, etc.
One of the top priorities for HR leaders is managing change within their organizations. This includes playing a significant role in growing their businesses while innovating for success (Garner, 2021, cited in Williams, 2021). However, change management is not an easy task, and requires detailed preparations and planning.
The finance department is responsible for managing the financial aspects of an organisation. The finances include collecting revenue from customers, managing expenses, and managing the cash flow. The finance department is also responsible for creating budgets for future projects, taking care of debt obligations, and meeting the financial needs of the stakeholders.
Marketing is about understanding the needs and desires of customers. Its goal is to increase the sales of a product/service by creating a positive image of the brand in the minds of the target customers. The marketing department is responsible for creating a marketing strategy which includes creating a marketing plan, defining the target audience, identifying the right channels for marketing the product/service, and setting the budget for the overall marketing activities. Marketing can help businesses develop and increase brand awareness, engagement, and sales with promotional campaigns (Indeed, 2021).
Research and Development (R&D)
The research and development department explores new ideas, designs prototypes, and tests the resulting products or services. It also works closely with the marketing department when developing new products and services. This function is so important that all big organisations spend millions of dollars on it every year.
Operations is responsible for using resources such as raw materials, finance, and workforce to create finished goods or services. It then ensures that these goods or services arrive on time and to the right quality standards (BBC, 2022). In short, the operations department is responsible for managing the day-to-day activities of an organisation. It also manages inventory, production, quality control, and logistics.
Supply chain (Sourcing)
Supply chain management is a very important function in a business. Imagine, how fashion companies get their products manufactured abroad. GAP, Primark, H&M, Next and may other companies work with suppliers in countries such as China, India, Bangladesh, Pakistan, Vietnam, Sri Lanka, Turkey etc.
A sourcing department deals with the pricing and purchasing of raw materials, components, equipment, supplies, and services, often purchasing high volumes of items with the goal of lower costs (Indeed, 2021). Without appropriate and affordable access to suppliers and raw materials, many companies will be unable to function profitably; hence the importance of supply chain management.
Information technology (IT)
The IT department is responsible for managing information technology aspects of an organisation. It is responsible for managing computer networks, computer hardware, and software applications. It also manages network security, data security, and privacy issues.
Relationship between different organisational functions
Various functions of an organisation are interdependent with each other. For example, the marketing function needs information from the research & development department in order to know what consumers want and need. Similarly, the sales function requires information about the company’s products and services. This information helps the sales team meet with customers and close deals.
The production and supply chain functions are also interdependent. The production function needs materials to produce goods or services. For example, a car manufacturing company needs parts in order to produce a car. The supply chain function manages materials in order to complete deliveries on time.
IT department is very important in any organisation. It helps the organisation run operations smoothly. However, it must depend on the HR department to provide it with appropriately skilled IT staff. Indeed, HR department plays a crucial role in the success of an organisation by addressing its human resource needs. This shows that different organisational functions are interdependent with each other as they depend on each other to function properly.
How do business functions link to organisational objectives and structures?
Business functions link to organisational structures in different ways. For example, some of the organisations are structured in line with their functions and have department such as marketing department, IT department, HR department etc.
Likewise, wider organisational objectives can not be successfully achieved if departmental objectives are not achieved. For instance, the growth objectives of a company are usually influenced by the current sales and progress. If the company is not doing well in terms of sales, and personnel management, thinking of further growth could be seriously questioned.
Summary of the relationship between different organisational functions
There are a variety of functions that an organisation needs to conduct to runt its operations efficiently. These functions work in collaboration with each other. Weaknesses in one may have massive knock-on impact on the rest of the others. Therefore, organisations must be agile, innovative, and have the ability to carry out those functions appropriately.
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Last update: 21 October 2022
BBC (2022) Business operations, available at: https://www.bbc.co.uk/bitesize/guides/zhs4gwx/revision/1 (accessed 21 October 2022)
Indeed (2021) Why is marketing important in business, available at: https://www.indeed.com/career-advice/career-development/why-marketing (accessed 20 October 2022)
Williams, C. (2021) Redefining the role of HR in 2021, available at: https://www.forbes.com/sites/forbeshumanresourcescouncil/2021/03/08/redefining-the-role-of-hr-in-2021/?sh=6dea807d56d5 (accessed 21 October 2022)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.