Each functional department does not exist for itself but to achieve a specific purpose that supports the whole business's goal. Understanding the purpose lets us judge whether a department is succeeding.
Purpose of core departments
- Production — ensures products are made at good quality, controlled cost and on time.
- Marketing — raises sales, builds the brand and meets customer wants.
- Finance — ensures enough money is available, costs are controlled and records are accurate.
- Human Resource — ensures the organisation has enough skilled, motivated workers.
Example
The Marketing Department of a beverage company launches a social-media campaign during the school holidays. Its purpose is clear: to raise sales and brand awareness among young families.
Purpose of support departments
The Purchasing Department aims to obtain quality raw materials at the lowest cost so production is not disrupted. The R&D Department aims to create innovation so products stay competitive. All these purposes ultimately support the organisation's profit and growth.
Department purpose and organisational goals
Each department's purpose must align with the organisation's overall vision, mission and objectives. If a company sets an objective to raise sales by 20 percent a year, then the purposes of Marketing, Production and Finance must be coordinated toward that target. To judge whether a purpose is being achieved, an organisation uses performance indicators — for example, total sales for Marketing, the defect rate for Production, or the staff turnover rate for Human Resource. These indicators make an abstract purpose measurable in real terms.
Key idea
Remember: each department's purpose = its specific contribution to the shared goal. Example: Finance's purpose is to control and channel money; Marketing's purpose is to sell and build the brand.
Remember
Do not mix up 'purpose' with 'activity'. A purpose is the desired result (e.g. raise sales); an activity is the way to achieve it (e.g. advertising).