Departments of a Company and its Functions (2023)

The Departments of a company Can be divided into commercial, human resources, finance and administrative departments.

According to the definition of the SAR, a company is an entity in which capital and labor are involved as factors of production. This means that we use labor factors, such as labor, to create products or services.

Departments of a Company and its Functions (1)

Categorization of companies

The companies can be distinguished in three sectors depending on the economic activity that they develop.

The companies of the primary sector are those dedicated to obtain resources of the nature, these can be agricultural, fishery or livestock. The companies in the secondary sector are those dedicated to industry and construction, that is, to take the raw materials obtained by the primary sector, and transform them into finished products. And, finally, the companies in the tertiary sector, are those destined to the production of services.

Being the companies a legal entity, also can be classified according to its constitution. They can be individual companies, which belong to a single person, or they can also be corporations. Companies are companies formed by a group of people, and within societies, we can make distinction based on the responsibility of its partners.

The companies with limited liability are those in which the partners have legal responsibility limited to the contribution made.

In public limited companies, capital is divided into shares, and partners are responsible for the shares they hold. And finally, cooperatives, which are societies in which responsibility is unlimited in the participation of partners, and decisions are made in a democratic way.

Companies can also be classifiable according to their size. In SMEs or large companies. SMEs are considered medium and small enterprises, up to a maximum of 250 workers. The large companies, which are those with more than 250 workers, have a characteristic organization to develop their economic function.

These are divided into specialized departments for better organization of tasks. These departments are, the commercial, the human resources, the finance and the administrative.

Although the company is fragmented into smaller departments, they all have to work in harmony and have great interdepartmental communication for the company to succeed in their business. If departments do not communicate with each other, or work together, the company will be fragmented and unlikely to survive in the market.

Departments of companies

commercial department

Departments of a Company and its Functions (2)

The commercial department of a company is one of its most important parts. It is in charge of creating the plans of general action, and another of medium to short term. The marketing plan created must act as a guide for action.

In this department the studies of markets are realized, these studies are necessary to understand and to analyze the viability of the company. They study the environment, here they value consumers, their buying habits, tastes, etc. And also the resources and competitors they can face in the market in which they are operating.

Through the market study, we also try to get the suppliers that are available, to find out which one offers the best price with the best conditions. This is called provisioning management.

Another function of the commercial department is to take care of the marketing and the customers. How to get new customers, promote the company's products and maximize sales.

In addition to all these functions, the commercial department is in charge of performing the management of the warehouse. This management consists of controlling raw materials, finished products, packaging, etc.

HR department

Departments of a Company and its Functions (3)

Depending on the size of the company, the human resources department can be managed by a few people, or be divided into more subsets. It has many varied functions in which it is necessary to manage a dedicated team.

  • Function of employment

This function consists of the organization of work templates, the selection and training of staff. The human resources department is in charge of planning the staff and the positions that are necessary, offering the jobs with a clear description of the profile that is needed and carrying out the selection process for new workers. Once the workers are selected to be part of the company, they also have to take care of training them. Another task is to process the dismissal procedures.

  • Staff Management Function

Once the workers become part of the company, the human resources department is in charge of formalizing the contracts, managing the payroll and social insurance, managing vacation permits, low, etc.; And establish a disciplinary regime if workers do not abide by the rules of the company.

This function can also include the function of labor relations that are developed in the company, and mediate in cases of problems with workers.

  • Human Resource Development Role

This characteristic activity of human resources implies that it is in charge of establishing training plans and studying the potential of staff. It is a very important task for the company, since a good development of the human resources, generates greater motivation in the workers, which translates as more productive employees.

Financial department

Departments of a Company and its Functions (4)

It is the department in charge of managing all the inflows and outflows of money. The basic functions that every financial department must fulfill are the control of accounting, cost management and the realization of budgets.

In the accounting of a company are reflected all the costs that the company has, they can be direct, indirect, fixed, variable costs...

Once you have the computation of costs, the financial department is in charge of managing them. The analysis of the costs determines if the company is profitable, or on the other hand if it is necessary to change the production or even close the company.

Another important function of the finance department is the creation of budgets. The budgets, in cases as corporations, have to be ratified by the board of directors. With the development of the budget, we control where it is going to be invested, where to spend and is established as a follow-up plan for the company.

For large listed companies, their financial department is the most important part for shareholders, since it is the one in charge of deciding what is done with the profits of the company and if dividends are made.

Administrative department

Departments of a Company and its Functions (5)

The administrative department is the one that is responsible for encompassing the other departments. Its main functions are those of organization, planning, direction, coordination, control and evaluation.

Organization and planning are one of the most important tasks of the administrative department. Through these are intercommunicated all departments to achieve a harmonic process in the company with the goals to be achieved, and how to achieve them. This ensures that each person and department is clear about their role, duties and responsibilities.

Through the direction, the instructions are given to carry out the organized and planned. It is important that the administration has good qualities for the success of the company.

The direction must be reasonable, that is, that orders sent to departments have to be realizable, taking into account the person, and if he has the experience and skills necessary to accomplish the task. The orders given must be complete and clear so that they do not lead to confusion.

All this is included in the coordination function of the administrative department. It is necessary to harmonize acts and efforts of all departments of the company. And finally evaluate the development of the business activities that are carried out and look for improvements if they are necessary.

The administrative department is also responsible for the correspondence that comes to the company. And it maintains the communication with suppliers and customers to maintain the commercial relationship of the environment of the company.

Also, it is in charge of the file of all the legal documents that the company has. It sorts and custody, and is responsible for its computer processing or microfilm to keep them for as long as these are in force.

When the companies are large, the administrative department is also in charge of the secretariat and communication. These tasks could be included in the coordination and organization function.

The part of the secretariat is responsible for facilitating relations between management and staff, through meetings, conferences, etc., as well as the relationship with the outside through interviews, press conferences and communiqués.


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  4. STOCK, Gregory N.; GREIS, Noel P.; KASARDA, John D. Enterprise logistics and supply chain structure: the role of fit.Journal of operations management, 2000, vol. 18, no. 5, p. 531-547.
  5. SHEREHIY, Bohdana; KARWOWSKI, Waldemar; LAYER, John K. A review of enterprise agility: Concepts, frameworks, and attributes.International Journal of Industrial Ergonomics, 2007, vol. 37, no. 5, p. 445-460.
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