What is a Business Function? | Examples & Definition of Business Functions

What is a Business Function?
Business Function Definition

On the globe, people take the second most popular professional work through the business. It is true to say that most business persons do not ideally know the functional areas of business. Businessmen generally take an initiative to know the basic business functions just to develop their capabilities as a professional. To run a business confidently and fruitfully, as a businessman, you need each and everything in need of business development strongly and quickly. Today, this article will show the functional areas of business and lots of things needed for its management.  But you come to reach all the required points; you need to know the definition of business function. Just take a look below.

What is a business function definition?

The functional areas of business denote the high level of the company’s capabilities including the processes for the business’s work. The business function ensures also the way of organization with its customers, employees, shareholders, and leaders. The company can have a primary business function as well as others. Generally, a service-providing business has various functions. Out of several functions, three levels are very important. To have proper knowledge about various business functions, just take a look below.

  • Marketing
  • Promotions
  • Social media advertising and graphic design.

On the other hand, depending on the size of the company or industry, there must be several top-level functions. Suppose, if you have a graphic design company, you do not need to have a manufacturing department. A furniture company needs mainly a manufacturing department.

Some companies need to set up various business functions for business achievement. In that case, the companies need to hire a specialist to manage functional areas of business properly.

Business Functions Examples

Here are 15 examples of business functions. Let’s have a look below.

business functions examples
Business Functions Examples

1. Strategy

The department of strategy is the right way of various business functions and it develops the strategy just for implementation of a company. A strategy-based business helps others to reach their goals with proper planning, decision-making, and risk management. The business works to discover the weakness & strengths of the company find its proper advantage & plan to achieve a business goal such as revenue increases, expansion of new markets, or internal distribution. This type of business function includes:

  • Vertical or Horizontal integration
  • Diversification
  • Market Penetration or expansion
  • Social Media Engagement
  • Sales Funnels
  • Search Engine Optimization
  • Cost Leadership
  • Cooperative Strategy Partnerships

2. Finance

If you like to make a finance and accounting firm, you need to handle business-related aspects such as funding, accounting, budgets, and financial oversight. Even the finance process comes with tax payments, tax files return, customer invoice, distribution of employee paychecks, and record cash flow with expenses, and handling finance & tax law. But some companies need to handle loans to purchase equipment, supplies, or inventory. 

3. Sales and Marketing

Sales and marketing teams can promote a company with potential clients, promoters, customers, or sponsors in need of building brand awareness & generating revenue. The target is to determine products or services, set affordable pricing and promotions, and innovate of brand, logo, and motto for effective marketing & advertisement. A marketing firm can go for website development, social media advertising and digital marketing, SEO, and public relations. These can be the best business functions examples. Some other duties of a marketing department are as follows:

  • Product packaging design
  • Event and media planning
  • Email marketing
  • Influencer marketing

4. Research & Development

Research & development departments make an innovation for the company. The department goes for market research, trend identification, industry comparisons, business experimentation, and product development to generate more profit. The research and development departments do strong & effective analyses of current market conditions on behalf of certain industries or sectors.  This is one of the most important functional areas of business.

5. Information technology

Generally, information technology comes to develop & operate applications, systems, hardware, and software. Mainly, IT company comes to install and maintain security and communication systems, digital networks, and cloud storage with the internet. The company deploys computers, printers & other electronic devices just to help employees. Sometimes, IT companies come to do website development with its maintenance.

6. Customer Service

When you come to have perfect knowledge of various business functions, you certainly give importance to customer service.  Customer service companies or departments take initiative to manage the relationship between the company and its customers. The department has the responsibility to handle customers’ questions, purchases, issues, or returns and continues a good relationship between the company and customers. The department is highly skilled in communication, empathy, patience, and conflict management. With the help of highly skilled technicians, customer service in person over the phone or through online chat platforms.

7. Human Resources

Human resources in business functions examples come with vital importance. It focuses on functions regarding the matters of recruiting talent, hiring candidates, explaining benefits, developing corporate policies, and handling all performance-based management. The department also ensures the relation among local, state, and labor laws. It resolves conflicts claims or allegations.

8. Design

The business function definition does not come right completely without the section of the design. The design department comes to handle visual management of brand strategy, design, and identity. The department works for both external as well as internal audiences including producing content or online advertisement, websites, and promotion through television and radio.

9. Communications

The communication department handles all the work like public relations, crisis management, and corporate communication for a brand or a company. The department takes responsibility to write press releases just to reach out to reporters or journalists for promoting a company. It also writes speeches for executives.

10. Governance

To complete the meaning of business function definition, you should know about governance. It is very important to know that corporate governance provides direction to the company through a system of rules, processes, and practices. The department also observes the company’s performance and how the company governs itself to what extent by identifying roles and positions. The philosophy of governance from time to time focuses on four concepts such as people, purpose, process, and performance.

11. Production

Production departments are the manufacturing branches where produced products go for delivery or services to customers. The department is designed with a factory setting in need of assembling or the process of foods and sweets.  But there is another type of production department where the production team produces the show for television, movie, and musical record.

12. Sourcing

The sourcing department in a company handles purchasing and pricing of materials, components, and services. Even the department works also for buying items hugely with low cost. Generally, the job of this department involves supply chain management, purchasing, and time savings. Sourcing plays a vital role in the cost structure of any size business with long-run attitudes. Undoubtedly, this one has become the most vital of business functions examples.

13. Quality management

The work of quality management firms or departments comes to make sure about the product’s reliability or consistency. Generally, quality management always looks after four steps of production like quality assurance, quality planning, quality control, and improvement of quality. Team of the management focuses on the quality of products or services. Even the department gives focuses on not only the quality but the production method also.

14. Distribution

Distribution takes a vital role to complete business function definition. The department takes responsibility brings products or services to customers’ locations on behalf of a company. The company or the manufacturer can come to sell and deliver itself or through other channels such as partners or distributors. It is very important to know that retail distribution comes with three wings.

  1. Intensive Distribution: Outlets as many as possible
  2. Selective distribution: Takes responsibility to select outlets in scheduled locations
  3. Exclusive distribution: For limited outlets

15. Operations

Operation is vital and one of the various business functions. It works to produce products and its delivery to customers. Even it goes for services as well. It also provides services for factory settings or the production of bakery items even in the business of sweets or other businesses.

Why is business function matter?

It is very common thing is that business planning is the key element of the business Architect’s toolkit. But at the same time, the functional area of business is also very important. Business function and services should come to be used for enterprise objectives. The concept of business function is very important during process management execution in an organization. With an example, it is very clear that a capability of human resource management includes payroll for a sub-capability. However, functional areas of business may include payroll functions under the supervision of financial management. Even it works as the capability of HR.

Business functions FAQs

1. What are the 6 important business functions?

The 6 most important business functions are Finance, Sales and Marketing, Customer Service, Production, Quality management, and Distribution.

2. Why do business functions need to work together?

For running a successful business function It is essential for a business to make a profit, increase output, expand, and strengthen the business, and ensure customer satisfaction in order to produce value for stakeholders. All business functions must work together towards this shared goal.

3. How to identify business functions?

The business function can identify by data analytics, business processes, business structure, and other related information about your company. It is necessary to relate business functions and organizational structure together to get better outcomes.

4. Business Functions vs Business Process: What’s the difference?

In business functions, activities are executed by a company and ensure the functioning of a business. Where in business process tasks are performed to achieve a goal. The business process contains the inputs for goods and services where business functions focus on specific business areas and both are important for business operations.

5. What are the basic function of business that helps to run a business?

Operations, finance, and marketing are the basic business function responsible to run a business.

1. Operations function

The operations function of business is responsible for producing goods and services. It must manage and control the supply chains and work with sales and marketing to meet customer demand. It requires the support of other functions within the organization, such as finance and marketing.

2. Finance function

This function of business is responsible for securing financial resources and allocating them to different parts of the company, budgeting, and providing materials to other functions. It is critical for the success of a large business, which uses short-term investments to make a return between the time of purchase and payment. Finance/accounting is also responsible for tracking the organization’s performance, paying bills, and collecting money.

3. Marketing function

This function of business is responsible for promoting goods and services and understanding the needs of customers. It must also create strategies to increase awareness of the organization’s product, such as advertising, sponsoring events, and printing T-shirts.

6. Why do Business Functions Matters?

The business function should be used to represent the control of resources and management of processes within an organization. Business functions are ideal for representation as process model swimlanes, as the business function can manage the processes within a particular swimlane. This approach has practical benefits, such as increased visibility into resource management and process execution.


Before you come for business, you should go through the details mentioned above to understand the business functions definition positively. With the knowledge of business functions, you should also have a basic idea about functional planning and its types.

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