Functions of Business

You must have already learned that the primary objective of a business is to earn Profit and In order to achieve its objectives, a business enterprise performs several functions, which may be broadly categorized as production, marketing, finance and personnel functions. All these functions are inter-dependent and inter-related. Thus, there must be proper integration of various functional areas of the business to achieve its objectives. This can be achieved by the management of the enterprise by effective planning, organising, directing and control.

The important functions of business are as follows:

 

Business functions

1.     Production function: Production refers to the transformation of raw materials into finished goods. It includes activities such as:

i)               Production planning and control

ii)             Maintaining plant and machinery

iii)           quality control

iv)            procuring raw materials and stores and

v)             Inventory control

2.     Purchase function: Big organization have a separate department for undertaking purchase activities. It includes activities such as:

i)               Inviting tenders

ii)             Locating the sources of supply

iii)           Placing order for right quantity at the right time

iv)            Maintaining proper flow of inventories

v)             Importing raw materials, machines and equipment

3.     Marketing function: Marketing refers to the distribution of goods and services produced by the production department with the help of market intermediaries and distribution network. It include activities such as:

i)               Product pricing

ii)             Packing and packaging

iii)           Proper distribution and transportation

iv)            Product promotion

4.     Finance function: Finance function refers to the procurement of finance and its judicious application. It includes activities such as:

i)               Determining the total capital requirement

ii)             Determining various sources of finance

iii)           Ensuring optimum use of financial resources and

iv)            Maintaining adequate cash flow

5.     Personnel function: Personnel function refers to the recruitment of the right person for the right job at the right time. It is concerned with:

i)               Human resource planning and development

ii)             Recruitment and selection, placement and induction

iii)           Training and development

iv)            Career development

v)             Undertaking motivational programmes.

6.     Public relation function: The public relation department is concerned with creating a favourable an impression of the business organization on the government agencies, employees, suppliers, and others. It also organizes publicity campaigns to enhance the image and goodwill of the business in society.

7.     Legal function: The legal the department ensures that the business units comply with various rules and regulations framed by the local, states and central governments from time to time.

8.     R&D function: Research and development (R&D) is an important activity in the modern competitive business world. It is necessary for automation, modernization and replacement of old and outdated methods and machines.

All the above are the main functions a business needs to perform to achieve its objectives. If you found the above information useful then subscribe to learnaturdesk to get notified when I upload a new topic and if you have any doubt regarding the topic feel free to drop a msg in the comment box below or through the contact form. I would love to hear from you.

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