Key Functional Areas and Essential Elements of a Company

Key Functional Areas of a Company

A company should be considered a global system comprised of several subsystems. We understand each basic area of the various functions performed by the company in the development of its business, which are necessary to achieve its ultimate goals. The establishment, organization, coordination, delineation, etc., of these areas is based on the direction of the company.

Supply and Production Area

The primary function of this area is to responsibly provide raw materials in the most advantageous way possible for the company, considering both physical and economic conditions. It also controls the entire process of transforming these materials into finished products, sometimes storing these products until their sale.

Financial Area

This area is concerned with obtaining and managing the financial resources needed by the company in the development of its business, including the study, selection, and investment of these resources.

Administrative Area

This area mainly deals with the management of all administrative documents (accounting, legal, etc.) that allow the proper functioning of the institution in the development of the procedures required for its activity.

Business Area

This area involves both the study of market needs and the selection of the most appropriate ways to introduce and sell the product or service, make the right marketing policies, etc.

Human Resources or Personnel Area

This area deals with aspects related to people working in the company, managing the available human resources in the most appropriate way, avoiding possible disputes, fostering motivation, etc.

Although each of the functional areas must conduct its own activities, these should be integrated into the system that forms the company to achieve the objectives set by management.

Essential Elements of a Company

1. The Human Factor: This consists of all those who bring financial resources to the company.
   • The Employer: Responsible for the management of the company.
   • The Landlord or Capitalist: Do not confuse the figures of the entrepreneur and the capitalist or owner.
   • Employees: Carry out work for the company in exchange for payment.
2. Capital: A group of properties that make up the business assets, which we can divide into two:
   • Fixed Capital or Non-current Assets: Tangible property items that remain in the business for a long time (machinery, buildings, facilities, etc.).
   • Working Capital or Current Assets: Intangible heritage elements that remain in the company for a short time (goods, etc.).
3. Organization: The different factors of the company must be properly organized to ensure maximum efficiency in achieving business goals.
4. External Environment: In its activity, the company correlates with agents in its environment (government agencies, suppliers, clients, etc.).