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Every business—whether a local coffee shop or a multinational corporation—relies on the same core functions working together like gears in a machine. On your exam, you're being tested on more than just naming these functions; you need to understand how they interact, where they overlap, and why certain functions take priority in different business scenarios. Questions often ask you to identify which function handles a specific problem or how two functions must collaborate to achieve a goal.
Think of business functions as specialized teams that each own a piece of the puzzle: value creation, resource management, revenue generation, and operational efficiency. The real test isn't whether you can define "marketing"—it's whether you can explain why marketing and R&D must collaborate on a product launch, or why finance and operations both care about cost reduction but approach it differently. Don't just memorize what each function does—know what business problem each one solves and how it connects to the others.
These functions focus on understanding what customers want and building products or services that meet those needs. The core principle here is that businesses exist to create value—first for customers, then for shareholders.
Compare: Marketing vs. Sales—both focus on customers, but marketing attracts and educates broad audiences while sales converts individual prospects into paying customers. If an exam question asks about "generating leads," think marketing; if it asks about "closing deals," think sales.
These functions ensure the organization has what it needs—money, people, and information—to operate effectively. The underlying principle is optimization: getting maximum output from limited inputs.
Compare: Finance vs. Accounting—accounting records and reports what happened (historical), while finance plans and decides what should happen (forward-looking). Both handle money, but accounting is about accuracy and compliance; finance is about strategy and growth.
These functions focus on how work gets done—transforming inputs into outputs as efficiently as possible. The core mechanism is process optimization: reducing waste, improving quality, and speeding up delivery.
Compare: Operations Management vs. Supply Chain Management—operations focuses on internal production processes, while supply chain extends externally to suppliers and distribution. Both aim to reduce costs, but operations controls what happens inside the factory; supply chain controls what happens before and after.
This function exists at the intersection of value creation and revenue protection. The principle is simple: acquiring a new customer costs far more than retaining an existing one.
Compare: Sales vs. Customer Service—sales focuses on acquiring new customers and closing initial transactions, while customer service focuses on retaining existing customers and maximizing lifetime value. Both require strong interpersonal skills, but sales is proactive (hunting) while service is reactive (supporting).
| Concept | Best Examples |
|---|---|
| Value Creation | Marketing, R&D, Sales |
| Revenue Generation | Sales, Marketing |
| Financial Management | Finance, Accounting |
| People Management | Human Resources |
| Process Efficiency | Operations Management, Supply Chain Management |
| Technology & Data | Information Technology, Accounting |
| Customer Retention | Customer Service, Sales |
| Cross-Functional Collaboration | R&D (works with all), IT (supports all) |
Which two functions both focus on customers but at different stages of the buying journey? What distinguishes their roles?
A company wants to launch a new product. Identify at least four business functions that must collaborate and explain each one's contribution.
Compare and contrast Finance and Accounting: What does each function prioritize, and how do their time orientations differ?
If a business is experiencing high employee turnover and declining product quality, which two functions should leadership examine first, and why?
FRQ-style: A manufacturing company discovers that production costs are rising while customer satisfaction is falling. Explain how Operations Management and Supply Chain Management would each approach this problem differently, and describe one way they might need to collaborate on a solution.