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What Is a Functional Process?

By Osmand Vitez
Updated May 16, 2024
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A functional process is the lowest part of a company’s functional area, which may be a business department such as accounting, production, or sales and marketing. A process simply represents how an individual completes a specific task. For example, in accounts payable — which is a functional activity in the functional area — the functional process may be to match vendor invoices to receiving tickets and then purchase orders. Only after the process is complete will an accounting supervisor authorize the payment due to the supplier. Essentially, a company has no end to the amount of processes in business operations, and each department depends on a certain amount in order to properly complete services, activities, and tasks that lead to profits.

Companies typically review each activity at some time in order to ensure the functional process serves the company in the best way possible. These reviews may result in changes to the process that both enhance it and the way a company does business. No process is typically withheld from the review process. The addition of new business, manager, or owner can trigger this review process. In some cases, a company may look to reduce processes in order to make a functional activity and department more efficient. This alteration can also lead to a company 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. Creating a business based on functional concepts often looks for developments based on competency or efficient activities and those easy to measure and understand. The downside to a functional workplace may be the lack of direct management in certain areas, difficulty changing a process, and the inability to make optimal choices. A company needs to decide if a functional process is best for its operation. There is no single activity that will work at full efficiency 100 percent of the time.

A process-style business environment focuses on external thinking, reduced interactions between departments, and responsibility from start to finish. In most cases, this business environment creates a highly segmented workplace. Though not entirely bad, this process can result in fragmented departments, complex processes, fewer checks and balances, or a loss of the economy of scale. Companies need to work fairly hard to overcome this extreme segmentation. Failure to do so can result in less communication in the workplace.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
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