Business Organization and Departments

Business Organization Different Departments

• Human Resources (HR): Responsible for hiring the right people, rewarding their work appropriately, and ensuring proper compensation. Recruitment, training, dismissal, and compensation are key functions.

• Finance and Account: Manages the financial resources for producing or providing services. This includes budgeting, forecasting (e.g., for wars or pandemics), maintaining records, paying bills (including fixed costs), and managing resources from various providers.

• Marketing: Develops strategies to promote, price, package, and distribute products/services to generate profit. Ensuring products are appealing to the target audience is important.

• Operations Management: Focuses on maintaining product quality and controlling the quantity and flow of inventory. Identifying efficient production methods and improving productivity are key goals.

Business Sectors

• Primary Sector: Extracts raw materials from land, sea, or air (e.g., farming, mining, fishing). Often closely monitored by governments due to environmental concerns. Common in less developed economies.

• Secondary Sector: Processes raw materials into manufactured goods (e.g., oil refinement, vehicle manufacturing). This sector is becoming more common in developing countries.

• Tertiary Sector: Provides services to consumers and businesses (e.g., leisure, banking, hospitality, education, healthcare). Common in developed economies.

• Quaternary Sector: Provides knowledge-focused services like information technology, research, and consultancy. Primarily found in developed countries.

Types of Business

• For-profit: Businesses aim to generate profit.
  • Common types: sole traders, partnerships, companies/corporations

For-profit Social Enterprises

• Cooperatives: Businesses owned and operated by members.
• Micro-financiers: Offer small loans to those typically excluded from traditional finance.
• Public-Private Partnerships (PPPs): Collaborations between private businesses and public sector bodies. Often involve infrastructure or service delivery.

Non-profit Social Enterprises

• Focus is on generating surpluses for social purposes, not profit distribution.
• Examples: non-governmental organizations (NGOs), charities

Business Tools

• SWOT analysis: Evaluates internal strengths and weaknesses, and external opportunities and threats, to identify areas of improvement.

• STEEPLE analysis: Examines external factors like social, technological, economic, ecological, political, legal, and ethical aspects of the business environment.

• Ansoff Matrix: A tool for determining strategic growth options by analyzing the relationship between a company’s existing products and its existing and potential markets.

• Key strategic growth options include market penetration (existing product), market development (new market), product development (new product), diversification (new product and market)

• BCG Matrix: Evaluates business units based on market share and market growth (Stars, Cash Cows, Question Marks, Dogs). Use to assess strategic priorities and allocate resources.

Decision-making Tools

• Decision Tree: Visual tool to help simplify complex decisions. Shows possible choices and likely outcomes, in order to make the best decisions.

• Fishbone Diagram: Brainstorming tool to identify root causes of problems.

• Force Field Analysis: Understand driving forces and restraining forces to plan for successful implementation of change or other projects.

• Gantt Chart: Scheduling tool for project management. Shows tasks, start times, durations, and completion dates in a visual way.

Other Concepts

• Economies of Scale: Reduction in the average cost per unit as output increases

• Horizontal Integration: Merging or acquiring businesses in the same industry

• Vertical Integration: Acquiring or merging with businesses at different stages of a supply chain (earlier, middle, or later stages)

• Market Share: The proportion of total market sales that a business holds. This can be measured, by values, percentages, or total numbers of goods sold.

• Market Growth: Increase in the total market size over a period of time. It's influenced by external factors such as economic, technological, and societal.

Marketing Mix

• Product: Meeting customer needs and expectations.
• Price: Cost of the product for the customer.
• Place: Distribution channel and/or physical location.
• Promotion: Ways of persuading customers to buy a product.

Explore the different departments within a business organization, including Human Resources, Finance, Marketing, and Operations Management. Understand how each department contributes to the overall functioning and success of the company. This quiz will test your knowledge of these essential business sectors.