In this post, we will discuss the functions of business, before this, let’s understand the concept first.
Business is an economic activity. It is concerned with the continuous and regular production and distribution of goods or services for satisfying human wants. It also involves the exchange of things.
Business means buying and selling of goods and services for profit.
Definition of Business:
According to B.O. Wheeler, “Business is an institution organized and operated to provide goods and services to society under the incentive of private gain.”
According to L.H. Haney, “Business is a human activity directed towards producing or acquiring wealth through buying and selling activities.”
Functions refer to a series of activities or tasks performed by the business to achieve pre-determined objectives. For the smooth conduct of business activities, there is a need to perform certain important functions.
Following are some important functions of business: – Functions of Business pdf
1. Purchase and store keeping :
It includes the buying of raw materials, components, spare parts, movable and immovable, assets relating to the functioning of the business activity, and all other items required for operating the business.
Care must be taken to maintain a proper inventory of materials. Overstocking of material blocks the working capital, on the other hand, under-stocking blocks the production cycle. Further, there must be a proper stock of finished goods to distribute them as per the delivery schedules.
2. Production :
Production means the conversion of raw material into semi-finished or finished products. The production department deals with activities like the design of the operations system (product design, process design, and location of facilities, facilities layout, and capacity planning) and operation and control decisions (routing, loading, scheduling, dispatching, and expediting).
It deals with creating and maintaining demand for goods and services produced by the production department. Marketing is the process of identifying the goods and services that customer needs and providing the same at the right price, place, and time.
4. Finance Function :
This function deals with obtaining and effectively utilizing funds necessary for efficient Operations. It ensures that the right amount of finance, at the right cost and at the right time is available for carrying out business operations. It also deals with the investment of funds in long-term assets and short-term assets to ensure smooth business functioning.
Finance is known as the lifeblood of a business organization. No business, small or large can operate their business activities without finance.
5. Personnel Function :
Personnel function covers areas like recruitment and selection, training, promotion and transfer, labor welfare, etc. This function deals with the effective utilization of human resources. It aims at selecting the right persons at the right place i.e. jobs and motivating them to work through teamwork and cooperate to achieve organizational goals. They must do the work with commitment and loyalty.
6. Research and Development :
Research and Development play an important role in product development. It helps to bring out product modifications and product innovations. Business firms need to spend a good amount of time on research and development activities. Many professional business firms set up a separate department for research and development activities to make a change in the business as per the requirement.
7. Public Relations :
There is a need to maintain good public relations with the various sections of the public. Therefore, it makes a good sense to maintain a separate department to look after public relations, especially in the case of large firms. It handles public queries, media queries, interviews, complaints, etc.
It develops good public relations and brings a positive image in the minds of the customer about the business, firm.
8. Sales Function :
The Sales department works in close coordination with the marketing department. The sales department is concerned with the Selling activities of the firm. It books orders from the customers and then distributes the goods through the distribution channels. This is one of the most important functions of business, which satisfied the consumers’ needs and wants.