Business environment

The external environment of a business includes forces that affect a business organization, as well as other business operating within the same environment, such forces are external to the organization and cannot be controlled by the management. It can be classified into two major elements;

1. Direct Element.
2. Indirect Element.

1. DIRECT ELEMENT: These include individuals and institutions who have considerable impact on the attainment of the organizational goals.
2. INDIRECT ELEMENT:
3. Political environment.
4. Technological environment.

• Social-cultural environment.

1. Legal environment.
2. Economic environment.
3. Demographical environment.

• Financial environment.
• Infrastructural environment.

1. International environment.
2. Ecological environment.

DEPARTMENTALIZATION

This is the way jobs are grouped into logical units. It ensures that activities that are similar are grouped into departments.

FUNCTIONS OF EACH DEPARTMENT

PERSONNEL DEPARTMENT: This is the department that is responsible for all matters concerning recruitment, selection, and training of staffs.

FUNCTIONS OF PERSONNEL DEPARTMENT

1. Determining and maintaining good relations with trade union.
2. Maintaining records and statistics of employment.
3. Coordinating performance appraisal scheme.
4. Coordinating promotion procedures.
5. Manpower planning and training.
6. Administration of wages and salaries.
7. Ensuring adequate safety measures and welfare services.
8. Developing and maintaining procedures for recruitment.
9. Discipline of members of staff.
10. Dismissal of members of staff.

1. PURCHASING DEPARTMENT: This department makes arrangements for purchase of all items required by the business.

FUNCTIONS OF PURCHASING DEPARTMENT

1. Processing of materials and assets.
2. Maintaining inventory level.
3. Monitoring of price of materials.
4. Controlling volume of materials coming into the store.
5. Advising production on late delivery.
6. Purchasing of materials at the least costs.
7. Maintaining records of operation.
8. Checking invoices presented by vendors.

1. FINANCE DEPARTMENT: This is a department that is concerned with the financial aspect of the organization. It is divided into different sections like accounting and auditing, etc.

FUNCTIONS OF FINANCE DEPARTMENT

1. Efficient management of the financial resources of an organization.
2. The finance department makes decisions on financial matters.
3. It provides permanent records of all transactions.
4. It evaluates the performance and profitability of the business organization.
5. Finance department is charged with the responsibility of controlling expenditure.
6. To control cost.
7. Keeping records of assets and liabilities.
8. It deals with tax matters on behalf of the organization.
9. Calculation of salaries and wages.

1. PRODUCTION DEPARTMENT: This department produces goods under the instructions of the production manager.

FUNCTIONS OF PRODUCTION DEPARTMENT

1. The production department deals with the control of cost of production.
2. It produces goods for the organization.
3. It embarks on produce design.
4. Ensuring quality control.
5. It carries out research in order to develop new products.
6. MARKETING AND SALES DEPARTMENT: This is the department that organizes the distribution and sales of goods. It ensures that the products of the firm are taken to the right place, at the right time and at the right price to meet demand.

FUNCTIONS OF SALES AND MARKETING DEPARTMENT

1. To identify customers need.
2. It advertises the products of the organization.
3. To plan the distribution of finished products.
4. In embarks on market research.
5. The goods produced by the organization is sold by this department.
6. It promotes the sales of goods.

SOCIAL RESPONSIBILITIES OF A BUSINESS

An organization should be socially responsible to all the people in the area where it operates.

An organization has responsibilities to the following;

1. GOVERNMENT: A business organization provides the following responsibilities to the government;
2. Tax payment.
3. Partnership with government to provide social amenities.
4. Compliance with government’s regulations and rules.
5. Using local input for production.
6. Accepting government regulatory rules.

2. COMMUNITY:
3. Sport sponsorship.
4. Rural development.
5. Employment opportunities.
6. Provision of infrastructural facilities.
7. Elimination of poverty.
8. Scholarship award to students.
9. Provision of quality products.
10. Preservation of culture of the people.
11. Donation to orphanages and rehabilitation centres.
12. CONSUMERS:
13. Protection against misleading advertising.
14. Consumer oriented labelling.
15. Provision of quality and reliable products.
16. Provision of pre-sales service. E.g, credit facilities.
17. Ensuring fair pricing of products.
18. Rendering after-sales service. E.g, installation.
19. Provision of information to make right choice.
20. Giving attention to complaints from the consumers.

4. EMPLOYEES:
5. Payment of fair remuneration.
6. Provision of conducive environment.
7. Ensuring security of job.
8. Provision of good welfare package.
9. Ensures that the workers are well trained.
10. Ensuring safety of the employees.
11. Indemnify employees in case of injury.
12. Ensuring job satisfaction.

5. SHAREHOLDERS:
6. Provision of satisfactory returns or profits.
7. Safety of investment of owners.
8. Distribution of profit as dividend.
9. Organizing annual general meetings.
10. Ensuring compliance with various accounting policies and standards.
11. Preparation of financial statements.
12. Provision of information about the organization to the owners.
13. Implementation of decision taken at the annual general meeting.

6. ENVIRONMENTAL RESPONSIBILTIES:
7. Development of pollution control techniques.
8. Adequate disposal of wastes.
9. Reduction of pollution in the environment.
10. Chemically treating wastes to make it harmless.

ASSIGNMENT

What is departmentalization

Explain the function of production and finance department