Why Is it Important to Combine Functions in Business?

It’s often a good idea for small businesses to combine functions, or departments, to control costs, provide continuity and improve communications. Many entrepreneurs organize new companies by combining functions that often overlap. Creating an organization chart that allows you to operate with fewer departments now, but having a plan with benchmarks for separating functions later, will help you grow in an organized rather than reactionary way.

New companies often combine human resources and finance, in part because the HR function often involves payroll and benefits management. The president or other senior manager might interview and hire employers, but a combined HR and accounting department can effectively bring new hires on board and manage their paperwork going forward. Sales and marketing are two functions often combined in the early stages of a business’s growth. Sales serves marketing, which comes first because of its planning role. As the organization grows, employees can focus on sales only -- under clear direction from the marketing department.

Some companies combine the administrative and HR functions, especially when the accounting function is outsourced. The office manager or owner’s administrative assistant often handles bringing employees on board. At other companies, the administrative function is combined with facility management or contract management, which includes managing contractors such as information technology, maintenance, copy machine leases or insurance. Consider combining your production, warehousing and shipping functions to keep your supply chain working efficiently.

The most obvious benefit of combining functions is that it reduces the number of managers needed and their costs. Instead of two department heads, you might hire one supervisor and one assistant manager and train them both to take over one of the functions when you are ready to split them. Some functions don’t require full-time work, so staffing them separately can waste money.

When you combine two functions that work closely together, such as HR and accounting or sales and marketing, you have better communication because the same person manages both functions. This prevents improper spending, sending different messages to customers and missing deadlines because one department relied on the other to submit something it did not.

When it’s time to split functions because you are growing at a pace that requires more attention to specific areas, having previously combined two functions makes the transition easier if you can move someone from the existing department to the new department. If you had contracted out two different functions because they only required part-time attention, you would need to train a new department head from scratch.