Advantages And Disadvantages Of Functional Structure

Good Essays
a) Functional Structure

A functional structure is such that the Organizational’s activities are grouped according to its purpose or areas of specialization. This approach involves a considerable amount of process standardization within a business, with the real decision making authority centered at the top of the organization. In this type of organization, for example, there may be a marketing department that focuses solely on marketing activities, a sales department that is only responsible for sales and a production department responsible for design and engineering.

Segregation of work based on function has several advantages, some of them are

 People involved in the function – both subordinates and supervisors would have experience
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This helps employees to get expertise in the function and develop specialized knowledge as they move up the hierarchy.
 Employees who are experts in the functional areas can perform tasks with high level of speed and efficiency that enhances productivity.
 Training of new members become easier

Functional structure has some disadvantages as well, including:

 People specialized in certain functions may find difficulties in understanding other functions and hence they are reluctant to change.
 As the organization grows bigger, functional areas become difficult to manage.
 Getting tasks completed that are across functions would require a very high level of co-ordination.
 Communication flow among functions tends to remain weak.

In our organization, there are functions segregated based on the tasks that each group performs. For example, people involved in customer support would only be involved in the tasks that they are allocated; similarly, there are teams responsible for specific functions within the product. HR department, Sales & Marketing, Development, Support & Maintenance are few of the functions within our
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These divisions have control over their day to day operations, they still are answerable to a central authority that provides the overall strategy for the organization and coordinates its implementation among the divisions. Each division will be responsible for its profit and loss as well. Large corporations, especially large multinational corporations, utilize divisional structure.

Few of the advantages of divisional organizational structure are:

 It allows the team to focus upon a single product or service, with the leadership structure that supports major strategic objectives
 Having a separate division with its own reporting structure, allows company to focus on its core tasks improving profit of the organization.
 Having focus on the product or service, improves the morale of the employee thereby improving productivity.
 Since the entire division is responsible for its profit and loss – it helps in quick decision making by the divisional managers/division heads.
 The division head would be well connected with the activities of the division.
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