15 Business Function Examples (With Definitions and Uses)

By Indeed Editorial Team

Published June 1, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Businesses offer professional goods and services to customers or clients with the intention of earning a profit. Regardless of the industry in which they operate, businesses typically have a primary function or focus. Understanding the basic functions of business and how to classify them can help you determine where to develop your capabilities to advance your career. In this article, we define business functions, explain their importance, and explore 15 examples to help you determine which business role you might be most interested in pursuing.

What is a business function?

A business function is a group of capabilities and processes a company uses to describe its work. These functions ensure an organization runs properly and does well for its customers, employees, leaders, and shareholders. A company may have one or more functions. It's common for companies to categorize their operations into core functions and support functions, where core functions refer to income-generating activities and support functions facilitate the core processes. Here is an example of a marketing firm's classification of offerings:

  • Core functions: marketing and promotions

  • Support functions: graphic design, client relations, and financial management

Depending on the industry or size of a company, some functions might not apply to the business. For example, a graphic design company likely doesn't have a manufacturing department, though a furniture company probably does. Further, larger companies might set up various business functions within their organization as departments, such as accounting. Conversely, smaller organizations might hire specialists within a field or outsource certain responsibilities to other professionals.

Read more: What Is Outsourcing at Work? (With Types and Advantages)

15 examples of business functions

Companies typically divide tasks into several functions or departments to help manage the roles of employees within the organization. The effective operation of each department is essential to the overall success of the business. Here is a list of 15 business function examples:

Strategy

The strategy team develops the approach for implementing change within a company. They discover the strengths and weaknesses of an organization, find its competitive advantage, and develop a plan to reach business goals, such as increasing revenue or expanding market share. This team engages in thoughtful planning, decision-making, and risk assessment to reach business goals. Common business strategies include:

  • Horizontal or vertical integration

  • Diversification

  • Market penetration or expansion

  • Sales funnels

  • Cost leadership

  • Cooperative strategy partnerships

Financial management

A finance or accounting firm or department manages the monetary aspects of the business, such as funding, budgets, accounting, and financial oversight. They typically process payroll, file tax returns, invoice customers, monitor employees' paid vacation time, record cash flow, conduct audits, and handle aspects of finance or tax law. Some small businesses may engage with financing firms to help secure loans for purchasing equipment, inventory or supplies, or for raising capital, most often in the manufacturing industry. The finance department of an organization is often responsible for determining annual budgets and allocating funds to other functions of the business.

Sales and marketing

The sales and marketing department promotes the company to connect with potential investors, clients, customers, or sponsors with the goal of building brand awareness and generating revenue. It's common for smaller businesses to outsource this function to marketing professionals, but larger businesses typically fill sales positions internally. The marketing team may develop a logo, tagline, and overall brand identity that resonates with customers. Depending on the business needs, they can also create effective marketing or advertising campaigns, along with website development or management. Other duties of the marketing firm or department include:

  • Digital and social media advertising

  • Search engine optimization

  • Product packaging design

  • Influencer marketing

  • Email marketing

Related: A Guide to Marketing as a Career

Research and development

Research and development (R&D) firms or departments are essential for business growth and innovation. They typically conduct market research, industry comparisons, trend identification, product development, and business experimentation to help companies expand their product lines, services, or revenue streams to generate more profit. R&D professionals have strong analysis experience and a good understanding of current market conditions for a certain industry or sector. Many consumer technologies and pharmaceutical companies invest in R&D firms or teams to develop products faster than their competitors and work diligently to enter the market first.

Information technology

Information technology (IT) companies or departments install and maintain a company's digital communication, security, internet, and cloud storage systems. They typically set up email for new hires, deploy computers, printers, and other electronic devices to employees, and help with technical troubleshooting. IT professionals specialize in the management and updates of applications, systems, hardware, and software throughout all levels of an organization.

Customer service

Business-to-customer (B2C) companies often establish customer service teams to manage the relationship with their customers. They may answer customer questions, help with purchases or returns, or facilitate warranty claims. These professionals are highly skilled in communication, conflict management, empathy, and patience. With the increase in digital technologies, customer service representatives can work in-person, over the phone, or through online chat platforms to assist customers.

Human resources

Human resource (HR) professionals and departments focus on functions related to employees, such as recruitment, candidate screenings, hiring employees, conducting performance reviews, addressing personnel issues, and developing corporate policies. As part of employee management, they may also handle termination or dismissal of employees, as needed. HR departments also ensure compliance with local, provincial, and national labour and employment laws, help to resolve conflict, and investigate claims or allegations.

Related: The 9 Functional Areas of Human Resources You Need to Know

Design

Well-structured and thoughtful designs can help foster a brand's image and reputation. Design firms or departments work closely with or within marketing departments to maintain consistency of brand strategy, identity, and design. They typically produce content for print or online advertisements, billboards, brochures, in-store signage, websites, and other internal or external promotional materials.

Communications

Communications professionals handle all aspects of public relations, corporate communications, and crisis management for a company or brand. Like the marketing team, they promote the company to the public. Unlike marketing, their promotion channels often involve the media instead of paid opportunities. They communicate brand changes or product launches through press releases, media events, and press conferences. These professionals may operate as spokespeople for the brand if executives aren't available for interviews. Additional responsibilities of this department include:

  • Speech writing

  • Key message development

  • Promotional campaign creation

  • Media monitoring and reporting

Governance

Corporate governance is the direction and control of a company through a system of rules, processes, and operations. In some organizations, the board of directors carries out this function by overseeing the performance of management and holding decision-makers accountable. The guiding philosophy of corporate governance often focuses on the four concepts of people, purpose, process, and performance.

Production

Production departments or companies are the manufacturing branches of a business that make the products or services for customers. The scale and size of a production department may vary, depending on the product or service they are developing. For example, it might be a large factory setting where a team manufactures automobile parts or a small office where developers work on application software. Another kind of production team may manage the creation of a television show, commercial, movie, or musical record.

Sourcing

Many manufacturing and retail businesses establish a sourcing department to handle the pricing and purchasing of raw materials, components, equipment, supplies, and services. It's common for sourcing professionals to purchase high volumes of items to keep costs low. Depending on the business and its needs, the sourcing team can handle purchasing, supply chain management, logistics, and strategic partnerships for one company or product or for several at a time. Sourcing plays a key role in determining the cost structure of any size business and its long-term position in the market.

Quality management

Quality management teams test and evaluate products and services to ensure the business offerings are consistent and reliable. These procedures often focus on four components: quality planning, assurance, control, and improvement. The teams typically test the products to ensure they work to their manufacturing specifications while reviewing and resolving causes of quality issues. This may involve reviewing both the product itself and the method of production. This function is vital to businesses, as a strong quality management team ensures it does not distribute defective or unsafe products to customers or end-users.

Operations

The operations or production function handles activities related to producing goods or providing services. Depending on the industry, this may be the core business process for a company or organization. For example, a restaurant's operations are in the kitchen, where an executive chef manages the team and develops the menu. This team is typically responsible for maintaining production levels and output quality.

Related: Difference Between General Manager vs. Director of Operations

Distribution

The distribution team determines the processes of supplying customers with products or services on behalf of a company. As the manufacturing department produces goods for sale, this team manages the distribution channels, making this an essential function of business. The manufacturer may conduct the product sales and delivery directly or through other channels, such as distributors or intermediary partners. Retail distribution often has three distinct levels:

  • Intensive distribution: Distribute to as many outlets as possible

  • Selective distribution: Distribute to select outlets in specific areas or locations

  • Exclusive distribution: Distribute to limited outlets


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