Interdependence of Functional Areas

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The functional areas of the organization are interdependent. The organization is a complex system, and its functions cannot be performed without each other. For example, sales and marketing can not perform if the product the organization is producing does not meet the needs of its customers.

The organization may need to coordinate with various functions in the organization to provide the services it offers. These relationships will vary depending on their size and type. For example, small businesses typically have fewer internal dependencies than large companies.

Functional Areas in an Organization

An organization has several different types of functional areas. Each area performs specific tasks that support the overall goals of the organization. An organization's functional areas include:

  • Research
  • Product Development
  • Business Operations
  • Finance and Accounting
  • Human Resources
  • Legal Services
  • Information Technology
  • Strategic Planning
  • Production
  • Supply chain management
  • Marketing
  • Sales Management

Interrelationship of Business Processes

Each functional area must work together for the organization to achieve its goals. A functional area is responsible for performing specific tasks needed by the organization. The output of a task performed by one function becomes the input for another function. For example:

  • The Human Resources function hires for all other functions.
  • Marketing does the customer research that helps Engineering function to design the product that meets customer requirements.
  • The production function requires inputs from the design function to produce a product.
  • Various functions in the organization must be aware of the decisions taken by other parties. For example, the supply chain management function needs to know the planned production to procure required inputs in time.

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