1.4 Interdependence with other key business functions

There will be a constant flow of information between operations and the other key business functions: marketing, human resources and finance. Each function relies on the other so that the business can achieve its goals. Therefore, with specialisation of the business functions there must be interdependence. See Source 1.11.

To illustrate the interdependence between the key business functions, consider the following interactions between each. In marketing, research identifies the features of a good that consumers desire and marketing strategies are developed to encourage purchases of that good. Operations must produce and supply a product that has the features and quality consumers demand as well as reliably distribute the product to the market. Innovation may be required in operations to create products as specified by marketing. The finance manager will create budgets and make funds available to purchase inputs and equipment, make repairs and perform routine maintenance. Operations will seek to keep under budget in order to maximise profit margins. Operations managers will inform human resources of the skills and experience it needs its workers to have. Human resources will ensure that enough employees with the appropriate skills are available for the operations function and provide training if needed. The human resources manager will use their leadership style and rewards to ensure quality work is done by employees in the operations function.

Changing operations will have impacts on the other key business functions. Changes in the costs of production may lead to higher prices, affecting marketing. Human resources will need retraining and some employees may be made redundant. Finance will be needed to purchase new technology, machinery and inputs. Changes in operations may take time and interrupt production, reducing profitability.