Functional Areas of Management

Home Assignment Answers Functional Areas of Management

Teams of employees who possess the similar skills and abilities refer to functional areas of management.  The focus of functional management is on the implementation of a task of an organization which comes under the functional areas.

Functional managers possess technical knowledge and skills in relation to the area that they are responsible to manage.

The areas of functional management are as follows:

  1. Human Resource Management
  2. Production Management
  3. Office Management
  4. Marketing Management
  5. Financial Management


Human resource management is also known as personnel management and manpower management. The department is responsible for procuring satisfactory work from the employees to give the business a competitive advantage. The role played by HR department is to manage the people of the company, handling safety issues, compensation and other monetary and non- monetary benefits, training of employees, appraisal of the performance of employees and rewarding them.

Human resource managers aim at obtaining a high level of productivity by maintaining healthy relations in the organization and by sorting out all the grievances of the employees. Role of communication in this area is very important because without communication it is not possible to understand the needs and problems of the employees.


The main aim of performing production function is to ensure that the goods and services are produced by keeping in mind the cost of production at the right time and in the right amount. Production management focuses on planning, organizing, coordinating, controlling and directing the production function.

The functions of production management are as follows:

  • Planning and development of a product
  • Location of plant
  • Plant design
  • Conservation of plant
  • System of production
  • Machines used in the production
  • Purchasing the material and its storage
  • Confirming actual control of production


Office management refers to designing and executing the work process in an office with the aim of improving efficacy and productivity. It focuses on making the best use of employees with the help of suitable plant and machinery and by providing safe and suitable workplace.

Office space, office environment, communication in the organization, handling emails, typing, duplicating, indexing, plant, and machinery, stationary, etc. are some of the important areas of office management.


By producing and exchanging goods and services with others in return of some value is an important marketing function. It includes:

  • Behavior of consumers
  • Marketing mix
  • Segmentation of markets
  • Decisions related to the product and its prices.
  • Promotion and advertisement
  • Physical distribution
  • Marketing research
  • International marketing


Studying the relation between raising the funds and its deployment is known as financial management. The areas covered in financial management include the cost of capital, capital budgeting, policies related to the dividend, portfolio management, sources of finance including both short and long-term.

Generally, there are three decisions related to financial management. These are:

  1. Policies of investment

It is related to expenses and capital budgeting. When an organization is spending money, all the proposals are arranged in a ranking order and then the investment decisions are taken accordingly.

  1. Financing methods

The organization after, considering the risk involved and the purpose of raising funds makes a proper mixture of short-term and long-term sources of funds which can provide the necessary amount of money for the proposed project.

  1. Decisions related to dividend

This decision is related to deciding the amount that is to be distributed to the shareholders and the distribution of extra stock shares.

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