The functional organizational structure helps in achieving the benefits of specialization of work. Advantages and Disadvantages of the Functional Organization Structure The Functional Organization Structure can be successfully applied in many areas. There is a general lack of coordination among the functional executives which causes the delay in decision making. This decreases the overall efficiency of the employee. 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). If an organization gets larger, it will be difficult t… It confers upon the holder an unlimited power of command over the people of other departments concerning their function. Here are the major disadvantages you must consider: Create Your Own Org Charts! It does not face the problem of Limited capabilities of a few line managers. In this article, we discuss the advantages and disadvantages of the functional structure, plus This facilitates better executive development. Hence Complexity The operation of the functional organizational structure is, complicated and is not easily Indeed, this type of structure is the most rigid of all possible structures. Another disadvantage of the functional organization is that if some work requires the intervention of two departments then it may be delayed due to lack of coordination between the departments which in turn will lead to the company losing its competitiveness with respect to competitors. It is a means of putting the specialists in top postings throughout the enterprise. (functional organizational structure). eval(ez_write_tag([[336,280],'googlesir_com-medrectangle-3','ezslot_1',105,'0','0']));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. When nearly similar skilled people are working together, conflicts may arise when one employee is promoted whereas others are not. The biggest disadvantage of functional organization is that since various departments are segregated on the basis of functions there is no scope of employees of one department helping or meeting the other department employees and hence in a way there are many companies in the form of departments within the company and each department is having separate goal instead of one common goal which can be harmful for the progress of the company in the long run. The benefits of the functional organization structure made it spread widely in the contemporary management. Disadvantages of the Functional Structure The functional structure also has inherent disadvantages. They focus more on their own goals and neglect the overall company objectives. Problems may arise among management if department heads are only focused on their department and do not communicate effectively with other departments. sample functional organizational structure chart. There is pointed supervision in the enterprise, and every function in charge looks after his functional area only. Functional Organization Structure Main Advantages: Offers a high level of specialization. Do you have any solutions to help fix this problem? Related: 12 Qualities of Effective Leadership in an Entrepreneur. Thanks so much for your work. Thus, Now you understood the concept of advantages and disadvantages of functional organizational structure. Another benefit of the functional organization is that it enables management to segregate work according to functions and thus avoid any duplication of work and also management can allocate the work to the concerned department quickly due to functional specialization. eval(ez_write_tag([[300,250],'googlesir_com-large-mobile-banner-1','ezslot_6',123,'0','0']));This facilitates better executive development. So, for example, a normal person is likely to take more time in taking the decision regarding finance related matter than a financial analyst handling the finance department. Thus, The employees in purchase functions are restricted in several ways by the financial manager and quality control manager also. Expertise Merits of functional organization: The following are the merits of functional organization. This creates confusion in the Enterprise. Another disadvantage of functional organization structure is that these functional groups may not be able to communicate more often which decreases flexibility and innovation. 1) No unity of command. List of the Advantages of the Matrix Organizational Structure 1. 13 Factors Affecting Structure of Sales Organization. advantages and disadvantages of organizational structure Uncategorized December 5, 2020 0 Comment In order to understand this better let’s look at some of the advantages and disadvantages of functional organization –. As one can see from the above that 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. This results in a loss of overall perspective in dealing with business problems. READ MORE on www.slideshare.net The Advantages & Disadvantages of a Mixed Model Approach He will have an official command or formal power finance function and perform it. Functional organizational structures are not nimble, flexible or easily adaptable. It violates the principles of unity of command since a person is accountable for more than one bosses. So for example, if in any company which has a functional organization in place and it has divided the department as IT department, finance department, marketing department, purchasing department and so on then any problem related to purchasing department will be handed over or solved by purchasing department only and not by any other department. Your email address will not be published. Related: 13 Factors Affecting Structure of Sales Organization. There is a general lack of coordination among the functional executives which causes the delay in decision making. Disadvantages No one “manages” a certain project, a project is managed by multiple functional managers, this can lead to the following: The client is not able to know what the status of the project really is, as no one can give him the whole picture. There are advantages in terms of efficient use of resources across products and communication moving in multiple directions across the organization , but a potential big disadvantage is that employees have to manage competing priorities from two different chains of command. The lack of new challenges can make them unenthusiastic for the job at hand. 4. Disadvantages of Functional Organization The disadvantages are as mentioned below. In this type of organization, the emphasis is on managing some functions wherever the function may be performed in the enterprise. What is Collective Bargaining and Why it is Important to Workers? Advantages And Disadvantages Of Functional Organization 1174 Words | 5 Pages Functional The functional structure focus on principles of specialization where people will be grouped in broad business activities such as marketing, production, human resources and finance. 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