Interrelationship Between Management Functions

FUNCTIONAL AREAS OF MANAGEMENT

In order to achieve its objectives, a business enterprise performs many functions which may be broadly grouped under the following headings: Production, Marketing, Finance and Personnel. In big business organisations, there are separate departments to look after these functional areas. It may be noted that these functions are inter-dependent and inter-related. For instance, production department depends upon marketing department to sell its output, and marketing Department depends upon production Department for the product of required quality to satisfy its customers. Thus, there must be proper integration of various functional areas of business to achieve its objectives. This can be achieved by the management of the enterprise by effective planning, organisation., direction and control.

The important functions of a business are briefly discussed below.

i. Finance Function

It deals with arrangement of sufficient capital for the smooth running of business. It also tries to ensure that there is proper utilization of resources. It takes many important decisions such as raising capital from various sources of finance, investment of funds in productive ventures, and levels of inventory of various items.

ii. Production Function

It is concerned with transformation of inputs like manpower, materials, machinery, capital, information and energy into specified outputs as demanded by the society. The production Department is entrusted with many activities such as production planning and control, quality control, procurement of materials, and storage of materials.

iii. Marketing Function

It is concerned with distribution of goods and services produced by production Department. A business can perform this function efficiently only if it is able to satisfy the needs of the customers. For this purpose, the marketing Department guides the production Department in product planning and development. It fixed the prices of various products produced by the business. It promotes the sale of goods through advertisement and sales promotion devices such as distribution of samples and novelty items, holding contests, organizing displays and exhibitions, etc.

iv. Personnel Function

This function is concerned with finding suitable employees, giving them training and fixing their remuneration and motivating them. The quality of human resources working in the enterprise is a critical factor in the achievement of business objectives. Therefore, it is necessary that the work-force is highly motivated and satisfied with the remuneration and facilities provided by the business.

v. Purchase Function

Traditionally, purchasing is considered a part of the production function. But in big organisations, there may be a separate department to perform complicated purchase activity such as inviting tenders, choosing the sources of the supply, making transport arrangements and import of raw materials and machines and equipment.

vi. Public Relations Function

Modern business houses want to be in touch with the public and government through their public relations department. This department organizes publicity campaigns to increase the image and goodwill of the business in the society.

vii. Legal function

In a big organisation, the legal department may be organised to ensure that the business house abiding by the rules and regulations framed by the government. It also gives advice to the management in case of disputes with the customers, suppliers and even government over various commercial matters.