THE DIFFERENT

FUNCTIONAL
AREAS OF
MANAGEMETN
LESSON 7
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Considering the career path of management?

Generally, there six functional areas of business

management involve marketing, finance, human
resources, technology and equipment, operations and
office management. Therefore, all business planners
should concentrate on researching and thoroughly
understanding these areas as they relate to the
individual business.

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 What Is Marketing?
Marketing refers to activities a
company undertakes
to promotee the buying or
selling of a product or service.
MARKETING MANAGEMENT Marketing includes advertising,
BY AL EXANDRA T WIN,INVESTOPEDIA
selling, and delivering products
to consumers or other
businesses. Some marketing is
done by affiliates on behalf of a
company.

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KEY TAKEAWAYS
•Marketing refers to all activities a company does to
promote and sell products or services to consumers.
•Marketing makes use of the "marketing mix," also known
as the four Ps—product, price, place, and promotion.
•At its core, marketing seeks to take a product or service,
identify its ideal customers, and draw the customers'
attention to the product or service available.
Understanding Marketing
Marketing as a discipline involves all the actions a company undertakes to draw
in customers and maintain relationships with them. Networking with potential or
past clients is part of the work too, and may include writing thank you emails,
playing golf with prospective clients, returning calls and emails quickly, and
meeting with clients for coffee or a meal.
Product, price, place, and promotion are the Four Ps of marketing. The Four Ps collectively make up the
essential mix a company needs to market a product or service. Neil Borden popularized the idea of
the marketing mix and the concept of the Four Ps in the 1950s.
 Financial Management
means planning, organizing,
directing and controlling the
financial activities such as
FINANCIAL MANAGEMENT procurement and utilization
BY MANAGEMENT STUDY GUIDE of funds of the enterprise. It
means applying general
management principles to
financial resources of the
enterprise.

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 1.Investment decisions includes investment in fixed assets (called as capital
budgeting). Investment in current assets are also a part of investment decisions
called as working capital decisions.

2. Financial decisions - They relate to the raising of finance from various

resources which will depend upon decision on type of source, period of financing,
cost of financing and the returns thereby.

3. Dividend decision - The finance manager has to take decision with regards to
the net profit distribution. Net profits are generally divided into two:
Dividend for shareholders- Dividend and the rate of it has to be decided.
Retained profits- Amount of retained profits has to be finalized which will depend
upon expansion and diversification plans of the enterprise.
Objectives of Financial Management
The financial management is generally concerned with procurement,
allocation and control of financial resources of a concern. The objectives
can be-
• To ensure regular and adequate supply of funds to the concern.
• To ensure adequate returns to the shareholders which will depend
upon the earning capacity, market price of the share, expectations of
the shareholders.
• To ensure optimum funds utilization. Once the funds are procured,
they should be utilized in maximum possible way at least cost.
• To ensure safety on investment, i.e, funds should be invested in safe
ventures so that adequate rate of return can be achieved.
• To plan a sound capital structure-There should be sound and fair
composition of capital so that a balance is maintained between debt
and equity capital.
 What Is Human Resources (HR)?
Human resources (HR) is the
division of a business that is
charged with finding, screening,
recruiting, and training job
applicants, as well as administering
HUMAN RESOURCE employee-benefit programs. HR
BY WILL KENTON, INVESTOPEDIA plays a key role in helping
companies deal with a fast-
changing business environment and
a greater demand for quality
employees in the 21st century.

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KEY TAKEAWAYS
• Human resources (HR) is the division of a business that is
charged with finding, screening, recruiting, and training job
applicants, and administering employee-benefit programs.
• Additional human resources responsibilities include
compensation and benefits, recruitment, firing, and keeping
up to date with any laws that may affect the company and
its employees.
• Many companies have moved away from traditional in-
house human resources (HR) administrative duties and
outsourced tasks like payroll and benefits to outside
vendors.
Understanding Human Resources
The presence of an HR department is an essential component of any business, regardless of the
organization's size. An HR department is tasked with maximizing employee productivity and
protecting the company from any issues that may arise within the workforce. HR responsibilities
include compensation and benefits, recruitment, firing, and keeping up to date with any laws that
may affect the company and its employees.

Research conducted by The Conference Board, a member-driven economic think tank,

has found six key people-related activities that HR must effectively do to add value to
a company. These include:
• Managing and using people effectively
• Tying performance appraisal and compensation to competencies
• Developing competencies that enhance individual and organizational performance
• Increasing the innovation, creativity, and flexibility necessary to enhance
competitiveness
• Applying new approaches to work process design, succession planning, career
development, and inter-organizational mobility
• Managing the implementation and integration of technology through improved
staffing, training, and communication with employees

An HR department that adopts HRM strategies typically plays a more active role in improving an
organization’s workforce. They may recommend processes, approaches, and business solutions to
management. Google is one example of an organization that has adopted a more active approach
to employee relations through their HR department. The company offers tons of employee perks,
and the company headquarters have a wide range of facilities for employees, including wellness
centers, roller hockey rinks, and horseshoe pits. For Google, happy employees are equivalent to
productive employees.
 What Is Back Office?
The back office is the portion of a
company made up of administration and
support personnel who are not client-
facing. Back-office functions include
settlements, clearances, record
BACK OFFICE maintenance, regulatory compliance,
accounting, and IT services. For example,
MANAGEMENT/OFFICE a financial services firm is segmented into
three parts: the front office (e.g., sales,
MANAGEMENT/ADMIN marketing, and customer support),
the middle office (risk management), and
BY WILL KENTON, INVESTOPEDIA
the back office (administrative and
support services).

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KEY TAKEAWAYS
• The back office is the portion of a company made up of
administration and support personnel, who are not
client-facing.
• Back-office functions include settlements, clearances,
record maintenance, regulatory compliance, accounting,
and IT services.
• The term "back office" originated when early companies
designed their offices so that the front portion contained
the associates who interact with customers, and the back
portion of the office contained associates who have no
interaction with customers, such as accounting clerks.
How the Back Office Works
The back office can be thought of as the part of a company responsible for providing all business
functions related to its operations. Despite their seemingly invisible presence, back-office personnel
provide essential functions to the business. The back office is an essential part of any firm and
associated job titles are often classified under "Operations." Their roles enable and equip front-
office personnel to perform their client-facing duties. The back office is sometimes used to describe
all jobs that do not directly generate revenue.

The term "back office" originated when early companies designed

their offices so that the front portion contained the associates who
interact with customers, and the back portion of the office contained
associates who have no interaction with customers, such as
accounting clerks.
Example of Back-Office
Today, most back-office positions are located away from the
company headquarters. Many are located in cities where
commercial leases are inexpensive, labor costs are low, and
an adequate labor pool is available. 
Alternatively, many companies have chosen to outsource
and/or offshore back-office roles to further reduce
costs. Technology has afforded many companies the
opportunity to allow remote-work arrangements, in which
associates work from home. Benefits include rent savings
and increased productivity. Additionally, remotely employing
back-office staff allows companies to access talent in various
areas and attract a diverse pool of applicants.