For companies to function properly it is necessary to perform many very different tasks. In addition, from the main activity to which they are engaged, it is necessary to carry out many other functions such as personnel management, company accounts or the payment of taxes so that the company operates properly.
However, they are divided into different areas and departments in which each worker has different functions. The sum of all departments is what makes up the global company, for instance, Microsoft teams.
Many different forms exist in the organization of the company. Therefore, here we want to show you what are the main areas and departments that we can find in a company today. Despite this, each company can design its structure by creating the departments that best suit its business model.
- 0.1 Administration Area
- 0.2 Production Area
- 0.3 Finance Area
- 0.4 Commercial Area
- 0.5 How To Organize The Departments
- 0.6 What Is The Right Way To Organize Departments?
- 0.7 The Department By Functions:
- 0.8 The Department By-Products:
- 0.9 The Department By The Geographical Situation:
- 0.10 The Department By Clients:
- 0.11 The Department By Projects:
- 0.12 The Department By Process:
- 1 Tips To Organize Your Departments
- 2 Conclusion
The general management and the different managers of each area form the administration area. It is an area where different company decisions are made. There comes the information from all other areas so that every meeting allows knowing what you should always do. Therefore, the structure is at the top of the business pyramid.
Administration Department is responsible for managing all the resources of the company to achieve the objectives set by the company.
Human Resources Department is where everything is managed relevant to employees’ affairs such as payroll; hiring, vacations, etc.
Within the production area, all the tasks necessary for the development of the products or services that will be sold later are carried out. Therefore, it is necessary to keep in mind the entire production process and all the materials needed to produce the products sold by the company. It is essential that this area is always fully communicated with the commercial and administrative area to know the production needs of the company.
Production Department: Sometimes organizations may have a department that controls production or several so that each one controls different things. In the case of having several, the production department focuses solely on the manufacture of the product or the management of the service.
Purchasing department: In many companies, there is this department specialized in making the necessary purchases for the production process. Larger organizations are very common and in which it is essential to find good raw materials and at the best price.
The financial area manages all the needs to keep the company’s accounts successful. In small businesses, it is possible that there is only one person in a department that takes care of the entire financial plot. However, in large companies, it can be divided into different specialized departments for each of the sections and tasks that it has.
Financial Department: In this department, they are responsible for the analysis of the company’s accounts to know how it is always working and make the corresponding financial decisions. This is essential to know if the company is doing well or it is necessary to improve the results obtained.
Accounting Department: Here they are responsible for reflecting on all the company’s accounts in the accounting books. Each one of the economic movements of the company must be registered in a legal way to be able to know what the situation of the company is at all times.
Treasury Department: It is closely related to accounting. It handles the outflows and entries of money that occur in the company. It aims to guarantee the liquidity of the company.
One of the keys to the company is the sale of its products. Therefore, the success of the commercial area depends largely on the success of the company. In this area, they are responsible for making all the decisions related to the marketing of the products, such as the price, the point of sale, or the advertising that is made of them to get them sold. It is often the case that the marketing part is separated from commercial sales teams.
Marketing Department: In this department, all decisions are made about the products offered by the company, the price, its distribution, etc. All this is attempted to manage by making decisions according to the brand you own.
Commercial Department: It oversees controlling all the commercial process that goes from when the product has just been manufactured until it is sold to the customer.
Sales Department: It is usually related to the distribution of the company’s product in the different establishments and points of sale in order to obtain the largest possible number of sales.
How To Organize The Departments
Designing the organization of the company implies ordering, structuring and integrating the organic units and the available resources of a company (technological, human, financial and material), in addition to establishing the responsibilities and relationships between them. Organizing a company correctly allows for better allocation and more appropriate use of resources to develop the necessary tasks set out in the business objectives. If you want to know how to design a company’s organization, stay tuned for this article.
What Is The Right Way To Organize Departments?
Here are more details about how to organize a company based on the type of departments and divisions:
The Department By Functions:
The entity is structured in areas or departments that group the necessary tasks to carry out a basic function of the company. This type of division allows you to get the most out of the technical skills of the components of the company, as it brings them together according to specialization. It is mostly used by organizations, especially SMEs, due to the accessibility that it allows. The functional organization chart can be used to show the structure of this organizational model.
The Department By-Products:
The areas or departments of the company are grouped according to the precise activities for the commercialization or production of a specific product or service. It facilitates coordination between the components of the company as it allows them to focus on a product. This structure is frequent in large companies that handle a wide variety of items.
The Department By The Geographical Situation:
The departments or divisions of a company are grouped into activities to operate in a specific geographical area. They help to improve the efficiency of activities to meet the demands of a market, know and adapt better to their needs.
The Department By Clients:
The division of the company is made to serve a certain type of client. For example, a sales department would be divided into men, women’s and children’s sections. This type of classification allows the components of the organization to have a greater knowledge of preferences and needs.
The Department By Projects:
The company is divided into areas that bring together the necessary activities to carry out a specific project. It allows concentrating and granting efficient use to the existing resources for each of the tasks.
The Department By Process:
The company is divided into departments that meet the tasks necessary to carry out the stage of a given process. It allows obtaining a greater efficiency in the realization of the process that involves.
Tips To Organize Your Departments
To succeed with your business, you must first know how to design the organization of a company. That is why you should take advantage of the following recommendations.
Set Clear Objectives:
For this define mission, vision, values, and objectives that you hope to achieve. Transmit them to the different members of the entity. Each department must have specific goals.
Analyzes the resources that are available, whether financial or human. You need to know how much stuff you have and what their capabilities are. By having information on resources, you will have more facilities to reduce costs and have the clearest ideas about production limits.
Make a list of the company’s activities, determining priorities, the time needed for execution and their executors.
The organization of the company must accommodate the constant variations of the market, technological advances and internal conditions of the company.
Keep strict control of the accounts, with taxes, costs, and profits. Remember that it is necessary not to spend more than what is entered.
This means that part of the space, effort, and funds is wasted. Here are some steps you can take to assess and reorganize your workspace to increase productivity.
1) Make A Map Of Your Establishment
The first step is to create a map illustrating your activities. To start, ask yourself what activities are creating value for your customers. These activities are for which customers are willing to pay.
Then create a map of your establishment showing only the places where these value-added activities are carried out. Also, calculate the percentage of these areas in relation to your entire establishment. The results may surprise you. The map tells you how focused you are on activities that generate income.
2) Visualize The Movement
Create a second map of your workspace, this time showing the movement of people, products and documents. One way to do this is to make something called a spaghetti diagram.
To do this, you must observe the work processes and draw lines on the map to indicate all the physical movements necessary for your operations. Each move must correspond to a separate line. Also, calculate the distance and time of each trip, as well as the waiting time at each stop.
3) Observe The Workspace
Ask managers to spend more time in the workspace to observe the layout of the premises and the workflow. Most managers do not spend enough time in the workspace. A five-minute visit is not enough to be able to make important decisions in an informed manner. You have to take the time to observe and understand.
4) Optimize Your Workspace
Take into account all your observations to find ways to reorganize your workplace. Involve your employees. Your objective should be to free up your workers and optimize your workspace for better performance. Having more time and space will allow you to do more for your customers.
We should know that each company chooses the department structure that best suits them according to the activity and size of the organization. This is why here we show you the main areas in which the activity of a company is divided and some of the possible departments and how to organize them.