The interrelationships between departments within the organization are critical to the company’s success. Interrelationships exist when each department within the organization has a relationship with the other departments. The departments must keep in close contact with one another.

Separate departments are common in larger organizations. The interrelationships between these departments within the organization are critical to the company’s success. To achieve common organizational goals, various departments in an organization collaborate and communicate with one another. Each department’s functions are interrelated and interconnected with those of other departments to ensure that the entire organizational system runs smoothly. Here are a few ways in which an organization’s departments can be interrelated:-

• Production v Purchase & Supply: The production and purchase departments are linked in this way: the production department provides raw material specifications for the product development. The purchasing department then obtains those raw materials on time and at a reasonable cost.
• Production v Research and Development: The research and development department and the production department collaborate closely. Through market research, the latter identifies new trends and innovations, while the former ensures that those innovations are incorporated into the manufacturing process. The key here is to meet the needs of the customer while also staying ahead of the competition.
• Production v Finance and Accounting: Because the production department proposes the raw materials and labor required in production, and the finance department uses their proposal to develop a budget for the procurement of raw materials, the finance and accounting departments are linked to the production and purchase departments.
• Marketing v Research and Development: The marketing, research, and development departments, as well as the production departments, have a close working relationship. Customers’ needs are identified through communication with the marketing department. The R&D department uses the data to come up with new ways to meet those needs, and the production department puts those ideas into action through product development and improvement.
• Finance vs. Human Resources: In various ways, the human resources department and the finance department are linked. For example, the human resource department determines the organization’s employment needs, including the appropriate wage amount for each position based on the current market wage rate and the company’s policies. After that, the finance department creates a payroll to distribute funds to each employee based on their wage rate.
• Marketing vs Finance Department: Marketing focuses on product development, pricing strategy, distribution channels, promotions, sales targets, sales volume, sales in comparison to competitors, brand awareness, and publicity, while finance is concerned with all financial aspects of a business such as profits, costs, project feasibility, and overall financial performance. Without marketing, product life cycles will not be managed, and sales will decline, resulting in lost profit. However, without the Finance department, there would be no marketing budget.
• Marketing vs Production Department: The marketing department constantly gathers information about customer needs and conducts surveys to gauge public opinion on product quality, price, and value, and then relays this information to the production department in order to produce what people want at a reasonable cost.
• Finance and Purchasing: The relationship between your purchasing and finance departments necessitates constant communication in both directions. Your purchasing department needs to be aware of the financial department’s capabilities and constraints. These include new sources of capital that allow for cost-effective inventory purchases, as well as cash flow issues that limit purchasing power. To keep your sales department supplied, your finance department needs to know when purchasing and supply are working on an upcoming expenditure, such as a new piece of equipment or a shipment of stock.