The Purpose & Areas of Organisations
To perform these activities, organisations rely on a wide range of technology systems. Each department will use different IT systems to help them perform their tasks efficiently and accurately to help the business achieve its aims.
In this lesson, we’ll learn about:
- Understand the purpose of different types of organisations
- Understand the key areas of organisations and how IT is used to support them
1. The Purpose of Organisations
Organisations serve different purposes in various sectors of the economy. Broadly speaking, organisations can be categorised as those that provide services or those that provide products.
Service Providing Organisations
These are businesses that offer intangible (non-physical) items to their customers. Examples of service-providing organisations include consulting firms, hospitals, law firms, and banks.
The main purpose of these organisations is to provide a service to their customers, such as advice, medical treatment, legal representation, or financial services.
These organisations typically focus on customer satisfaction and quality of service, as the value they provide is intangible and cannot be replicated.
Service-providing organisations often rely on word of mouth and reputation to attract new customers and retain existing ones.
Some examples of sectors and the services they offer include:
- Hospitality – This sector provides hotels, restaurants and theme parks.
- Finance – This sector provides banking, financial advice, credit checking and loans.
- Education – This sector provides schools, universities and online learning.
- Healthcare – This sector produces doctors, hospitals, dentists & opticians.
- Personal care – The sector provides hairdressers, masseurs and manicurists.
Product Providing Organisations
These offer tangible goods to their customers. Examples of product-providing organisations include manufacturing companies, retail stores, and e-commerce websites.
The main purpose of these organisations is to produce and sell products that meet the needs and wants of their customers.
Product-providing organisations focus on producing high-quality products at a competitive price.
They often rely on marketing and branding to differentiate their products from those of their competitors and attract customers.
Some examples of sectors and the products they offer include:
- Manufacturing – This sector makes vehicles, tools and clothing.
- Construction – This sector produces homes, offices and bridges.
- Entertainment – This sector makes movies, TV shows, and other types of videos.
- Publishing – This sector makes books, magazines and posters.
- Retail – This sector sells goods like clothing, groceries, electronics or furniture.
Further Thought
Think about how many services you are subscribed to? Would any of these be better as a single product you could purchase?
2. Organisation Areas & Their IT systems
Organisations can be divided into various key areas, each of which plays an important role in the success of the company. Information Technology plays a crucial role in supporting these areas, improving efficiency and productivity, and enabling organisations to stay competitive.
Human Resources
This department is responsible for managing an organisation’s employees, including recruitment, compensation, benefits and training.
IT systems can be used to automate and streamline HR processes, such as employee recruitment, onboarding, training, performance evaluation, and compensation management.
Additionally, IT systems can provide HR departments with access to employee information, benefits administration, and payroll systems.
Research, Design, and Development
This department is responsible for conducting research, developing new ideas and technologies, and finding ways to improve existing products and processes within an organisation.
IT systems can be used to manage product development processes, track project progress, and collaborate with team members.
Additionally, IT systems can provide access to data and information, which can be used to inform decisions and drive innovation.
Logistics
This is the department responsible for making sure that the product ordered actually gets to the customer.
IT systems can be used to track shipments, manage warehouses, and coordinate transportation.
Additionally, IT systems can provide real-time information about the status of deliveries, helping organisations to respond quickly to changes and improve their overall operations.
Marketing
This is the business area responsible for making the product, service or business itself visible to the public.
IT systems can be used to gather and analyse data on consumer behaviour, track marketing campaigns, and manage customer relationships.
Additionally, IT systems can provide organisations with access to digital marketing tools, such as social media and email marketing, which can help organisations reach a wider audience and improve their marketing efforts.
Finance
This is the department responsible for handling everything to do with the money a business makes and spends.
IT enables organisations to manage their financial operations efficiently. IT systems can be used to automate financial processes, such as invoicing, accounts payable, and accounts receivable.
Additionally, IT systems can provide access to financial data, which can be used to inform decision-making and ensure compliance with financial regulations.
Management
This department will be responsible for the day-to-day running of the business.
IT support management by providing access to data and information, which can be used to inform decision-making and improve organisational performance. IT systems can be used to track key performance indicators, manage projects, and monitor operations.
Additionally, IT systems can provide organisations with access to collaboration tools, which can improve communication and teamwork.
Further Thought
Look at each of these key areas again. Can you think of any other ways they might use technology to complete their tasks?
Lesson Summary
So to summarise what we’ve learnt in this lesson:
- Service-providing organisations are businesses that offer intangible (non-physical) items to their customers.
- Product-providing organisations, on the other hand, offer tangible goods to their customers.
- The Human Resources (HR) department is responsible for managing an organisation’s employees. It is used to streamline HR processes and provide access to employee information, benefits administration, and payroll systems.
- Research, Design and Development (RDD) is responsible for conducting research, developing new ideas and technologies, and finding ways to improve existing products and processes within an organisation. IT is used to manage development processes and access data for driving innovation.
- Logistics is responsible for making sure that the product ordered actually gets to the customer. IT is used to track deliveries and manage warehouses.
- Marketing is responsible for making the product, service or business itself visible to the public. IT is used to gather & analyse data on consumers and use digital marketing tools.
- The finance department is responsible for handling everything to do with the money a business makes and spends. IT is used to automate financial processes and provide access to financial data for decision-making.
- Management is responsible for the day-to-day running of the business. IT is used to gather data to inform decision-making, improve performance and aid collaboration.