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- LAND – site on which the business is located and natural resources it might use.

- ENTERPRISE – owners and shareholders.

Functional areas.
All businesses combine factors of production as an essential part of their production activities. To combine these factors, to engage in production and to achieve their objectives organisations undertake a number of functions. The major business functions include:

. finance

. production

. human resources

. administration

. research and development
Business requirements for functional areas depends on its size, for example small business might merge many of these functions within their administration department, with responsibility in the hand of one or two people. As a business grows the number of people required to carry out these functions increases.

The financial function.

Extensive use of IT

Produces standards

cost data

Customers Auditors Inland
Revenue and

(price list) (accounts)
Custom & Excise

(information relating

to tax liability)

Figure 1.3: The financial function

A separate department normally carries out the finance function of the business. The finance department carries out a number of key activities:

. records all financial data

. chases up slow payers

. collects payments from customers

. provides information to external bodies

. analyses costs

. advises board of directors

. monitors and analyses financial data

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