Functional Areas of a Company (Meaning and Explanation)

We explain what the functional areas of a company are and the characteristics of each one. Also, what are B Corps?

What are the functional areas of a company?

The functional areas of a company are the departments or business units, which have specific functions to make the company operate efficiently.

are teams of employees who have similar skills and experience and that, together, satisfy the needs of the area within the organization. The departments are developed progressively, depending on the growth of the company structure.

In the case of startups or small businesses, it is likely that one person or a few are in charge of multiple tasks. When the company grows and, as a consequence, so does its internal structure, it is necessary to create specialized departments or teams that work in line with the organization's objectives and policies.

What are the functional areas?

The functional areas of a company are similar from one to another, regardless of the field in which they specialize. However, Depending on the size of the organization, the structure and distribution varies of each functional area.

In the case of small companies, there are areas that fulfill two or more functions and, in the case of medium or large companies, it is essential to organize work through different departments or areas, in order to optimize the company's performance. In a medium or large structure, the functional areas of a company can be:

Direction It is the key area of any company, which makes decisions, establishes objectives and directs the rest of the organization. She is responsible for controlling all functional areas.
Accounting and finance It is the area responsible for the monetary and financial management of the company. This includes controlling employee and supplier payroll, financial reporting, and business automation, for example through accounting software.
Production It is the functional area of the business that, through various processes, converts inputs or raw materials into finished products. To ensure optimal performance of the production process, the area must be in charge of monitoring and quality control in the different stages of production.
Marketing and advertising It is the area in charge of obtaining clients and developing an effective communication strategy in order to meet marketing objectives. Develops and coordinates the institutional image, brand, products, points of sale, dissemination and promotion.
Human resources It is the area in charge of searching, selecting and recruiting the people that the company needs to employ. In addition, it is responsible for managing everything related to human capital (administrative, legal matters, training, internal communication, etc.).
Information technologies It is the area responsible for developing the technological structure, hardware, software and computer networks within the organization. Their tasks include both technical support for employees and information security management to protect corporate data.
Customer service It is the area in charge of interacting with clients in order to establish and consolidate the relationship. You must respond to queries, process orders, address concerns and complaints, so the ability to empathize and negotiate are essential requirements for the area.
Shopping It is the area that is in charge of purchasing raw materials, machinery, equipment and supplies necessary for the performance of the work of employees and the company as a whole. You can also control merchandise (stock control) to avoid shortages.
Legal It is the area responsible for providing legal advice to the company, its departments and employees. Its advisory services extend to the development of new businesses, contract management, real estate transactions, customer complaints, product defects, employment law, among others.
Of innovation It is the area where new ideas emerge and where their subsequent implementation is consulted, debated and analyzed. The objective of the area is to improve the company's commercial practices and to that end it is responsible for investigating, analyzing and providing reports for decision making.

You may be interested: Organizational Objectives

B Corps

B companies (or B corporations) are a new concept that is part of the current business era and that is changing the way of thinking and developing organizations. Although the structure of each functional area is maintained, its objectives must be aligned with the “triple impact”, composed of three guidelines:

Be a company that creates positive impact in the social sphere and the environmental.
Be responsible and have as its primary purpose the interests of the workers, the community and the environment.
Be transparent and publish an annual report on social and environmental impact, certified by an external body.

This new paradigm redefines the meaning of success in business, where it is not only enough to create a company to generate profits, but it must justify its existence so that it contributes to social and environmental development, without harming or destroying them (as happens with most current companies, worldwide).

The new paradigm does not conceive of making money at the expense of misusing resources. Business success goes hand in hand with the care and development of the entire society.

For this to be possible and for B companies to have support for their actions, they operate according to social, environmental and transparency standards.

Private companies receive certification from “B corporation”, a global non-profit organization that has offices in the United States, Europe, Canada, Australia, New Zealand and a partnership in Latin America with Sistema B, a non-profit organization .

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