Produces standards
cost data
Customers Auditors Inland
Revenue and
(price list) (accounts)
Custom & Excise
(information
relating
to tax liability)
Figure 1.3: The financial function
A separate department normally carries out the finance function of the
business. The finance department carries out a number of key activities:
. records all financial data
. chases up slow payers
. collects payments from customers
. provides information to external bodies
. analyses costs
. advises board of directors
. monitors and analyses financial data
. advices managers and budget holders
Production function.
Production covers all the activities that must be undertaken to make the
firm’s products, from the receipt, of raw materials through to the output
of the final product. The production function concentrates primarily upon
planning and controlling the various stages of production so that the most
efficient use is made of business resources.
Production manager responsible for:
. maintaining supplies of components and raw materials to ensure
continuous production
. ensuring that the precise requirements of customers are met
. monitoring quality to insure that finished products meet the quality
standards expected by customers
. using resources – people, machinery and production space – as
efficiently as possible to make the business competitive in the
markets in which it trades.
One of the most important issues in production is quality. Modern
businesses compete just as strongly on the quality of their goods and
services as they do on price.
For example it is vital for a washing machine manufacturer to produce a
high-quality product. If the machine is not reliable or does not have a
wide range of functions, customers are more likely to purchase a
competitor’s product.
Figure 1.4: The links between the production function and other
departments
The human resource function.
Personnel management considers the tasks involved in managing people –
recruitment, selection and so forth – as separate elements. It does not
take into account how these elements can combine to achieve organisational
objectives.
The personnel management approach makes decisions relating to recruitment,
training and pay systems independently, without considering the impact the
individual decisions have on each other aspects of management and the
achievement of corporate objectives.
Human resources management (HRM) elevates the effective use of a business’s
labour force to an issue to be considered by senior managers as an
essential element of the organisation’s strategy. This approach has raised
the profile (and salaries) of those employed in human resource management.
The human resources function engages in a number of activities to ensure
employees are utilised affectively. These activities are carried out with
the aim of contributing to the achievement of the business’s objectives.
Workforce plan sets out likely future needs for labour and how these needs
might be met. Achieving the workforce plan involves the human resource
function in a number of day-to-day activities.
. recruiting employees – both internally and externally
. training new and existing employees
. paying salaries
. dealing with disciplinary matters and grievances
. overseeing industrial relations, by seeking to avoid disputes and
maintain harmonious relations and constant production
. developing and monitoring an employee appraisal system designed to
assess performance, set targets for achievement and identify any
training needs
Figure 1.5: Developing a human resources plan
The marketing function.
The marketing department carries out a wide range of functions on behalf of
the business. Essentially marketing is communications. The marketing
department communicates with a number of groups inside and outside the
business as it carries out its tasks.
Marketing activities:
. keeping customers satisfied
. discovering the needs of customers and advising the production
function accordingly
. carrying the responsibility for ensuring the effective distribution of
products to wholesalers and retailers
. liasing with marketing agencies to provide the necessary expertise
(small firms)
. if the firm is an export, the marketing department may have contact
with government agencies.
Marketing provides the organisation with information about its customers
and its markets. Effective marketing can offer businesses a number of
benefits:
. early warning of changes in consumer tastes and fashions through
regular market research
. knowledge about competitors and information regarding competitors’
product
. the means to present the company in a positive light through public
relations activities
. allowing the firm to improve the quality of its products by
coordinating and analysing customer complaints
. providing a catalyst for growth by forging relationships with
distributors, retailers and customers in new markets
. supplying consumers with the products they want and giving high levels
of customer satisfaction, which might permit a business to charge
higher prices thereby increasing its profitability.
The administration function.
The scope of the administration department varies enormously between
organisations. In a small business the administration function might
incorporate a number of the functions like finance , personnel and
marketing. However, larger organisations are more likely to operate a
specialist administration department.
A typical administration department has a number of functions:
. Administration department carries out organisation’s IT system.
. Clerical and support service. Information processing, data processing,
filing and reception services can be provided to all areas of the
organisation.
. Security and maintenance. These services are essential to the smooth
running of the business and to the effective operation of other
business functions such as production in particular.
. In some businesses, the administration function takes responsibility
for important public relations activities such as customer services.
The research and development function.
The nature of research and development (R&D) varies enormously between
businesses. Traditionally, the term research and development is taken to
refer to scientific research undertaken by firms producing manufactured
goods, high technology products or pharmaceuticals. However, R&D is equally
important to firms providing services.
By investigating in research and development a business seeks to maintain
competitiveness against its rivals. Competitiveness measures a business’s
performance in comparison with rival firms in the same market. A highly
competitive firm has some advantage over other businesses. This competitive
edge can take a number of forms:
. lower prices
. more advanced and sophisticated products
. a better image with consumers
. a good reputation for advise and after-sales service
. reliability in terms of operation and delivery dates
Types of research:
. basic research
. applied research
. development
The prime function of R&D is to develop new products that can give the firm
a competitive edge in the market. This necessary involves the R&D
department in close liaison with staff in market research, design and
production.
Function 1.6: The nature of business activity
Functional areas of Tesco plc.
The diagram above shows the key functional areas or departments of Tesco,
as one of the leading retailers in the U.K. It is currently the leading
supermarket chain in Britain, with a higher market share than its leading
rivals, Asda-Wallmart, Sainsbury’s and Safeway.
I have explained earlier the key functional areas of a typical business
and Tesco, as the diagram shows, displays this type of structure. For
example, the Company Secretary, Rowley Ager is responsible for Pensions,
the Company Secretariat (the administrative staff), the Treasury, Taxation,
Site Facilities, Transport and all aspects of Consumer Law.
The Finance Department, directed by Andrew Higginson, is responsible for
all aspects of finance and audit, and also for European affairs. These
functions are shown in Figure 1.3 in my introductory section. I have no
detailed information on Finance within Tesco other than financial data
available from the Company Accounts and from the Tesco and Bized
websites……… and these are more relevant to a detailed finance study of
Tesco as a company, a topic to be studied in a later Unit.
The Marketing Department, directed by Tim Mason, is responsible for all
aspects of marketing , Customer Service, Advertising, Market Research,
Clubcard, Estates and Metros. Since the early 1990s Tesco marketing
strategy has been to become the best in terms of price, quality and
service. Objectives are set, and ways found of meeting them, in all aspects
of company’s operation.
The Retail Department, directed by Michael Wemms, is responsible for all
retail operations and express stores.
Tesco first ventured into foreign markets when it acquired stores in Irish
Republic in 1978, but these were sold in 1986. The 1990s produced a much
better climate for European expansion. Now Tesco operates 80 stores in
Central Europe, and 16 stores in two Far East countries trading both under
the Tesco and subsidiary fascias. The 13 Tesco stores in the Czech Republic
and Slovakia, 29 stores including 5 supermarkets in Hungary, 31 stores in
Poland. Also Tesco plan to open 12 hypermarkets in Thailand and in South
Korea over the next three years.
The Human Resources Department within Tesco is responsible for many
thousands of employees across the whole spectrum of the organisation. Tesco
employs 154,000 people in the UK and 27,000 in Ireland and Europe. It does
not appear on the organisation chart, which I obtained from Tesco, because
this function is somewhat complex and shared between the main headquarters
Страницы: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16
