Production and the Functional Units of a Firm:

There are three primary functions in any business company viz., marketing, production and finance. The primary concern of production managers is to manage the activities of this conversion process or production. More than a half of all workers in a company are directly involved in the production function of the organization, and over three-fourths of a typical organization's material equipment costs are incurred by the production function. Marketing managers is concerned with the creation of demand for an organization's product or services. Finance managers have the task of gaining the financial objectives of the firm. As illustrated in Figure, the three primary functions are not independent; in fact, there is a considerable interaction among them. The demand for products drives the production function. Accounting and financial policies influence production decisions, and the production functions directly affect the future product demand and availability of financial resources. In addition, most organisations have additional supporting functions as well. For example, many organisations have an information systems communication that has the task to gather, organize and distribute information to the other functional units. The research and development & engineering functions to provide technical support in the design of both the products and the production processes that make the products. The human resource function is concerned with the training, selection, and compensation of personnel.