Functional processes are the basic activities that make up a company’s functional area, such as accounting or sales. Companies review and revise these processes to improve efficiency and profitability, but must decide if a functional or process-style environment is best for their operation.
A functional process is the lowest part of a company’s functional area, which may be a commercial department such as accounting, manufacturing, or sales and marketing. A process simply represents how an individual completes a specific activity. For example, in Accounts Payable – which is a functional activity in the functional area – the functional process might be to match supplier invoices to receipt of tickets and then to purchase orders. Only after the process is complete will an accounting supervisor authorize the payment due to the supplier. Basically, a company has no end to the amount of processes in business operations and every department depends on a certain amount to successfully complete services, tasks and activities that lead to profits.
Companies typically review each activity at a point in time to ensure that the functional process serves the business in the best possible way. These revisions can involve changes to the process that improve it and the way a company does business. Typically no process is held back from the review process. Adding a new business, manager, or owner can trigger this review process. In some cases, a company may seek to reduce processes in order to make a functional business and department more efficient. This change can also lead to a business becoming more profitable as it reduces costs.
In some cases, it is possible to separate a functional process into two individual parts: functional or process. Building a business based on functional concepts often looks for developments based on skills or activities that are efficient and those that are easy to measure and understand. The downside of a functional work environment can be a lack of hands-on management in certain areas, difficulty changing a process, and an inability to make optimal choices. A business must decide if a functional process is best for its operation. There is no single business that will operate at full efficiency 100 percent of the time.
A process-style business environment focuses on external thinking, reduced interactions between departments, and end-to-end accountability. In most cases, this corporate environment creates a highly segmented workplace. While not entirely bad, this process can result in fragmented departments, complex processes, fewer checks and balances, or a loss of economy of scale. Companies have to work hard enough to overcome this extreme segmentation. Otherwise, you may experience less communication in the workplace.
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