Just like different parts of the body function together to keep the body functioning, different parts of the business work to keep the business functioning. 

These different parts of the business are called the functional areas of business.

Functional areas of business are the team of employees specializing in a specific area of business operation. These functional areas of the business are sometimes called the business units.

There are five major functional areas of business which are: Sales and marketing, accounting and finance, insurance and risk management, employment and human resources management, and production and operation.

In this post, we shall be taking a closer look at each of them.

Sales And Marketing Unit

This performs the primary activity of marketing and sales

They are mainly concerned with identifying consumer needs and providing goods and services that meet these needs. 

The sales and marketing department seeks to build a good relationship between the business and customers by ensuring that their needs are met.

They also ensure that the right kind of products is offered at the right price, in the right place and through the right medium.

In essence, the marketing and sales department aims to apply the marketing mix in selling the company products.

Marketing and sales units perform activities such as identifying, creating, communicating and delivering value to customers. 

It should be noted that the way and manner that the marketing and sales department performs its marketing activities is more or less determined by the marketing orientation(s) of the organisation 

Functions of the sales and marketing unit

1. They perform market research for the organization.

2. They build trust between the business and customers by developing a product that suits the consumer's needs.

3. Through labelling and packaging, they differentiate the business product.

4. Sales and marketing department also provides sales and customer services

5. They decide which promotion and advertising policy the company should partake in.

6. They ensure that goods and services are available in a convenient place for consumers to buy.

Production And Operation Management Unit

Every business organisation produces a good or service, which it intends to sell to consumers as a means of meeting their needs.

The production and operation management unit is concerned with all activities involved in converting raw material/input, capital, and human resources into finished goods that can be sold to consumers.

This unit is concerned with the process by which goods are produced and services are provided.

Production and operation management is considered the heart of the business because the core of every business activity is the product offering.

Functions of the production and operation management unit

1. They supervise and direct all activities involved in the production of goods and services

2. They are involved in the planning of production and manufacturing modules in a company

3. They are involved in the day-to-day activities of running the business.

4. They ensure that the machines are in good working conditions.

5. Cost and quality control is yet another function of the production and operation management unit. By this, we mean that they ensure that high-quality goods and services are produced at the lowest cost possible.

6. They also create product design as well as manage the inventory of the business

Employment Relation And Human Resource Management Unit

Every organisational require people to manage and execute its business operation

The employment relation and human resource management unit is the functional areas involved in managing the human resources of an organization.

They are in charge of managing everything and anything related to employment and employees in the organization.

They perform acquiring the service of people, developing and motivating them, all in a bid to achieve the highest possible performance from employees.

Functions of employment and human resource management

1. They ensure that the right people are recruited for the right job and at the right time.

2. They train and orientate new and existing workers about the goal and objective of the business and motivate them towards achieving the business goals.

3. While product and operation managers guarantee the good working condition of machines, employment and human resource management ensures the good working condition of employees of the business.

4. They are responsible for making sure that every worker's entitlement and compensation are paid adequately and on time. 

This ensures that employees are motivated towards achieving the company goals.

5. Every country has its labour laws that must be obeyed by every law-abiding business. 

Hence, it is the responsibility of the employment and human resources management unit to ensure that the business complies with applicable labour laws.

6. They are in charge of managing the people of the organization.

7. They plan and effect the exit of employees from the organization as may be appropriate from time to time.

Insurance And Risk Management Unit

Business, as all entrepreneur knows, is full of risks. Hence, the insurance and risk management function ensures that specific risks are managed appropriately. 

More appropriately, we can define insurance and risk management as a gamut of activities that aims at minimizing the adverse effect of risk in an organization.

Functions of insurance and employment management unit

1. Identification and assessment of risk and hazards of the organization and developing appropriate response to mitigate the adverse effect of this risk.

2. They align the insurance policy of the business towards achieving its goals.

3. Communicating safety behaviour to every department of the organization.

4. Through insurance, they protect the company against financial losses.

5. They also build preventive mechanisms against future risk.

Accounting And Finance Unit

This is perhaps the most important functional area of business. 

The reason is that no business can successfully operate without adequate financing. 

The accounting and finance unit is responsible for planning for, obtaining, and managing a company's fund. 

This unit is tasked with the responsibility of properly managing a company fund and finance.

The accounting and finance unit is also in charge of collecting, recording and analysing the financial activities of a business.

Functions Of The Accounting And Finance Unit

1. Through financial and managerial accounting, they provide information to both internal and external stakeholders.

2. They also evaluate the financial plans of the business by creating budgets and financial records.

3. They track all expenditures of the business and ensure that the money going out of the business is used for the right purpose. By doing so, they help minimize cases of fraud.

4. They are also responsible for ensuring that the company pays the right tax.

5. They ensure that fund is available for payment of workers' salaries. 

6. They are in charge of money management in the organization

7. They prepared financial statements such as statements of profit or loss, balance sheets, etc so that users of accounting information can make informed decisions.


Having these business units is very important for business success. Large businesses like corporations always find it easy to set up this business unit. 

However,  Small businesses like sole proprietorships usually do not find it helpful economically to set up this functional area of business.

As we have seen in most cases, the sole proprietor usually doubles up as the accountant and salesman. This perhaps explains why so many small and large business is failing.

To ensure the businesses continue to operate successfully, each business unit should be present in every organization so that the business can easily achieve its organisational goals.

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