Functional Areas of Business: Importance and Skill Requirements

BSc (Hons) Business Management with
Foundation
BMP3004
World of Work
Functional Areas
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1.0 Introduction
The Business is an activity which involves exchange i.e. buying and selling of goods
and services in consideration of monetary amount. The main motive to carry out any business
activity is to earn profit (Boone, Kurtz and Berston, 2019). To run business effectively, it
requires the various functional divisions. The functional divisions refers to grouping of
various departments of similar nature and specialization and then connecting it to one main
node of organization. For effective completion of activities the functional divisions are
created. The functional departments are based on organizations needs and structure as there
is no predefined number of departments to be in existence in any organization. In this case
study the analysis of IOM electronics Ltd. is being carried out and highlights the functional
areas and focuses on the importance of these areas. The skill sets required for each functional
area has also been highlighted.
2.0 What is a business?
The term 'business' is referred to the activities which involves the producing and
exchanging of goods and services for profit motive. The business motive may be profit or
nonprofit motive. The nonprofit business includes the charitable or non-governmental
organizations whose main motive is to serve public. The business organizations increase the
ingenious activity involved to commercial, professional and industrial activities. The business
may take up any forms of structure and ownership to exist. In this case the IOM company is a
small organisation which deals in electronic components which has its working in
Manchester and Liverpool (De Grauwe and Grimaldi, 2018).
3.0 What is Functional areas of business - Definition
The Functional area refers to the division of employees who possess the same
expertise and skill set. The term Functional area is referred to the creation of various
functional divisions according to their same functions. The functional divisions are created so
that work can be continued smoothly in the organization.
4.0 What are the key functional areas of a business?
The key functional areas depend on the organization system and structure. The
organization creates the functional areas to avoid the complexity and it helps in ease of
functions. The functional area helps in the proper flow of activities and coordination of
various activities. For example, the marketing department oversees the activities related to the
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