advantages and disadvantages of functional structure

The functional structure describes an organizational structure in which the division of work is paramount. This structure can be rigid and the standardized ways and high formalization can hamper or impede faster decision making. Functional structures results in occupational specialization as a particular department is only concerned with one aspect of activities and workers receive the expert guidance of specialist. This helps employees to get expertise in the function and develop specialized knowledge as they move up the hierarchy. Employees are possible to become experts. The following are the advantages of functional organisation structure: (1) Benefits of Specialisation: The whole company is divided into many departments on the basis of major activities to be performed. Features of Secondary Market. Advantages and disadvantages of a matrix structure In a matrix structure, the power is delegated on two primary basis, first is the functional are and the second is project to project. The functional structure is commonly found in small companies and also in large companies with single product line or narrow product ranges. Skill Development. Firstly, when the specialist workers of a particular field are in a group together in a functional division, there are high chances that the function will be successful and the organization will be successful, ultimately. Three primary structures have become the foundation for how an organization is run: functional; projectized; and matrix. eval(ez_write_tag([[580,400],'googlesir_com-leader-4','ezslot_12',123,'0','0']));This facilitates better executive development. Subsequently, Outsourcing such services can also save time, reduce cost and ensure that the taxes are correctly calculated. 4. Disadvantages: Divisional structure prevents organizations from getting the most out of economies of scale. Jobs … “Communication is transfer of information from one person to another, whether or not it elicits confidence. Each structure has its distinctive advantages and disadvantages which will run through now. Let’s try to clear ideas by listing the advantages and disadvantages of this organization. Functional structure is well suited for larger organizations with diversified activities and operations that req1uire a high degree of specialization. In this article, we are going to review the advantages and disadvantages of each organizational structure: Functional, Projectized, and Matrix. Because functions are separate from one another, employees may have little understanding of and concern for the specialty areas outside their own functional area. Your IP: 51.68.153.78 The great advantage of this option is that a business can optimize it structure along multiple dimensions at the same time. This will reduce communication channels. The advantages of a functional organizational structure When an organization is structured in a functional way, it is important to know what are the advantages and disadvantages of this choice. Dual command. Each unit performs […] Because resources specialized in one area, report to the same manager who knows the domain or area as well. Each employee will report to his direct functional manager. This can create some conflict. In the decentralized model, the decisions making is faster and there is fairness to the employee. Advantages and Disadvantages of Functional Organization ... functional organization has both advantages as well disadvantages and any company thinking of adopting this type of structure should carefully analyze both the aspects and then take the decision. There are three main types of organizational structure: functional structure, divisional structure and a blend of the two, called matrix structure. 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. Cooperation and performance within each division is increased as a result it encourages competition between each department. - In the functional structure, functions are all separate, resulting in employees having very little understanding or concern for any area outside of their own functional area. Aug 24, 2018 Sep 10, 2018 by Brandon Gaille. Advantages and Disadvantages of the Functional Organization Structure. The organizational structure can be classified under following two types: ADVERTISEMENTS: 1. The functional organizational structure groups employees according to broad business activities, resulting in departments such as finance, marketing and production. This results in more and better work being accomplished in much lesser time. This structure can be rigid and the standardized ways and high formalization can hamper or impede faster decision making. As a single division does not produce enough to take great benefits out of the economies of scale. Disadvantages 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. Therefore, it mitigates the production level and make harder for the organization to achieve goals. Minimal Duplication of Efforts: In this type of organisation unnecessary duplication of efforts is … Advantage: Specialization The most obvious advantage of a functional organization is that grouping employees by specialization ensures a dependable level of departmental competence. ADVERTISEMENTS: Main disadvantages of functional organisation: (1) Ignorance of Organisational Objectives: ADVERTISEMENTS: Each departmental head works according to his sweet will. 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