The Functional Organization Structure can be successfully applied in many areas. The functional organization may have unhealthy competition working with the other areas. The advantages and disadvantages of a hierarchical organizational structure involve communication, innovation, and collaboration. It vertically structures each department with roles from the president to finance and sales departments, to customer service, to employees assigned to one product or service. In one example, there may be a request from the marketing department which may not be prioritized in order to attend to the concerns of the sales department by adding more people. Organizational functions within an organization are Sales and Marketing, production, human resources, finance, Research & development, and Purchasing etc. Chris Joseph - Updated February 06, 2018 . The matrix organizational structure is a combination of two or more different kinds of organizational structures, such as project management or functional management. 3. A functional organization groups workers together and has a hierachial reporting system. Absence of Unity of Command The basis of this functional organization structure is an arrangement where a worker has different managers for different areas of the organization operation. The advantages of a functional organizational structure. One manager would be responsible for each of these functions separately, which means that the finance manager would be responsible for financial activities and would have direct command over all such activities carried out in the enterprise. Workers are surprised by a number of instructions from different functional Heads.eval(ez_write_tag([[250,250],'googlesir_com-leader-4','ezslot_13',109,'0','0']));eval(ez_write_tag([[250,250],'googlesir_com-leader-4','ezslot_14',109,'0','1'])); Thus, The employees in purchase functions are restricted in several ways by the financial manager and quality control manager also. Advantages And Disadvantages Of A Functional Organizational Structure 757 Words | 4 Pages. You can easily access the experts you need because they are in the same functional area. Your email address will not be published. Advantages: easy to understand, Specializations develop, Economies of scale, Communication within functions, Career paths, Fewer people. Top 10 Need & Importance of Workers Participation in Management, Top 10 Challenges of Collective Bargaining in India, 11 Things Required for Collective Bargaining Succeed, 17 Nature and Characteristics of Collective Bargaining (With Examples). This is so important for large organizations that have many functional levels within company as employers will be able to perform their duties which boost the production. Projectized organizational structure has both advantages and disadvantages. Disadvantages of Functional Organizational Structure, 17 Factors Affecting Economic Environment, Privatization: Meaning, Features, Scope, Objectives, 18 Nature and Characteristics of Entrepreneurship, Branch Accounts: Meaning, Definition, Types, 14 Elements of Good and Effective Planning (How its work), External Environmental Analysis: Meaning, Features, Need & Importance, Top 10 Characteristics of Good and Ideal Project Planning, 20 Types of Entrepreneurs (Informative Explained), 18 Key Success Factors in Retail Business (With Examples). Related: Top 15 Characteristics of Creativity (Creativity as a skill). When a decision problem requires the involvement of more than one specialist. Ideally, the companies decide based on what is urgently needed. Advantages & disadvantages of divisional organizational structure. One advantage of the matrix organizational structure is that people across different functional areas have a better understanding of their coworkers in other areas. Let’s start with the advantages: No change. The functional structure is one type of organizational structure that helps companies manage employees and meet their business goals. It stifles innovation when the problem occurs or environment changes. This will keep them aiming for advancement and development. This is a more decentralised type of operation where each division functions much like its own separate company. A functional structure is a commonly used organizational structure in which the organization is divided into smaller groups based on specialized functional areas such as production, marketing, and sales. Also learn about its advantages and disadvantages! Organizations may choose from a number of common operating structures. The organizational structure can be classified under following two types: ADVERTISEMENTS: 1. … If employees and managemen… This creates confusion in the Enterprise. Fixed rules of intra-organization procedures and structures are set and usually written in a language, which leaves no discretion for interpretation. Organizations choose their organizational structure based on many factors like: size, its geographic location, the manner of delivering different products and services that they will offer. It also requires a management system which allows promotion, development and visibility of skills of people in each functional area. Disadvantages of a functional organizational structure include: - Not getting the best resources for the project: Functional managers sometimes give their worst resources to the project managers, because either they want to get rid of them for some time or they want them to learn and get some experience while working on a project. Each employee will report to his direct functional manager. Following are the disadvantages of functional organizational structure: The operation of the functional organizational structure is, complicated and is not easily understood due to its various technicalities. All the employees know exactly what position they are in and also know what job they have to do. ADVERTISEMENTS: Types of Organisational Structures: their Advantages and Disadvantages! Because functions are separate from one another, employees may have little understanding of and concern for the specialty areas outside their own functional area. When a company uses this type of structure, it groups its people according to their knowledge and skills which help them become specialists on that field. A functional organizational structure is a structure used to organize workers. The organizational structure examples are usually a subject of study so that there can be a perfect structure for a particular company. This facilitates better executive development. Functional organization makes for clear lines -- lines of communication, lines between departments and jobs, and the line that is the chain of command. Hybrid Organisational Structure: Exhibit 10.9 (a) illustrates the hybrid organisational structure. Disadvantages In functional organization, each group perform their duties independently from other functional groups, but sometimes that can fail. This silo mentality can cause problems around: 1. aligning priorities across the business 2. the flow of information and communication 3. collaboration 4. co-ordination of decision-making 5. embedding and managing change across departments Functional structures are common in a wide ran… Following are the important advantages of functional organizational structure: The functional organizational structure helps in achieving the benefits of specialization of work.eval(ez_write_tag([[300,250],'googlesir_com-box-4','ezslot_7',120,'0','0'])); Every functional in charge is an expert in his area and can help the subordinate to perform better in his area. Hierarchical structure of an organization usually has vertical levels leading up to the top head – the CEO or Managing director. A number of my blog readers have complained about my blog not operating correctly in Explorer but looks great in Chrome. Cooperation and communication between departments and units may be poor. Speaking of a multinational organization, accounting activities from all the regional offices and the headquarters would be handled by one accounting department. 2. Our jobs as leaders is to help deliver the advantages and prevent the potential disadvantages. nasser in advantages of a functional structure is it correct according to your. In this article, we are going to review the advantages and disadvantages of each organizational structure: Functional, Projectized, and Matrix. It helps in maintaining ability and uniformity in the performance of functional areas throughout the Enterprise. The functional structure is an organizational structure that divides its operations into separate departments or units according to the role of each department. The benefits of the functional organization structure made it spread widely in the contemporary management. People across different functional areas whole enterprise easily adaptable looks after his functional area.! 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