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advantages of functional organizational structure

Functional organization in one form or the other exists in all business concerns, particularly at the top. The functional structure is based on an organization being divided up into smaller groups with specific tasks or roles. Types of Organizational Structures Functional. This system provides ample opportunities for minute specialization to its maximum extent. It will lead to poor communication and coordination across functional … Functional division also makes it difficult for departments to understand larger company concerns. In the functional structure, such as shown in the following Facebook organizational chart, functions are separated into different groups, resulting in some defects.Here are the major disadvantages you must consider: Create Your Own Org Charts! Appropriateness Divisional Structure. There are three common organizational structures, and project managers work in all of them: functional, project, and matrix. This note introduces basic principles of organizational design and the advantages of several common organizational structures. Advantages & Disadvantages of Bureaucratic Organizational Structure. Each employee will report to his direct functional manager. 1. Functional Structure The functional structure in the firm’s organizational structure divides different functions into different groups such as the marketing department, finance department and human resources department. The matrix organizational structure is a combination of two or more different kinds of organizational structures, such as project management or functional management. Functional structure divides the organization based on specialized functional areas such as production, marketing, and sales for the purpose of management. Advantages of a Functional Structure. A functional structure is such that the Organizational’s activities are grouped according to its purpose or areas of specialization. These "tall" organizations are the most traditional organizational structure. 3. The organizational structure determines how the organization performs or operates. Everyone is going to be better off with the organizational structure that fits the project team and parent organization best. Advantages of the Functional Organizational Structure. The advantages of a functional organizational structure. If you’ve had a job, you likely worked in a functional organizational structure. The layers give bureaucracies a vertical thrust when laid out in an organizational chart. 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. As long as […] The functional structure is commonly found in small companies and also in large companies with single product line or narrow product ranges. The organizational structure could group those who work in a specific department together, or the grouping could be based on those who work in a functional area such as finance or marketing. Management layers characterize bureaucratic organizations. Functional organization structure A functional organizational structure is the most common of the three organizational structures adopted by most companies. Employees in entry-level positions would receive their daily assignments from their direct supervisor. When an organization is structured in a functional way, it is important to know what are the advantages and disadvantages of this choice. The advantages of functional organization structure Lauren Nelson - Updated April 17, 2017 Every business or organisation is structured differently, depending on its needs and goals. 2. Employees are possible to become experts. section 3, advantages of functional structure will be discussed, in section 4, challenges of functional structure and operational issues. Functional organization structure is suitable for small as well as those entities that offer one type of services or products regularly; for example, medical clinics, car-repairing shops, hotels, and restaurants. Alignment of corporate and divisional goals. Advantages: 1. Functional organisational structure refers to the structure in which different departments are created on the basis of major functions performed in the organisation. Remedies of functional and operational issues will make up section 5 while the paper ends in section 6 conclusion. 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 . 2. A Functional organizational structure has several advantages and disadvantages when it comes to managing projects: Advantages. Employees do not report to multiple managers. A functional organizational structure is a structure that consists of activities such as coordination, supervision and task allocation. 2. Functional Organizational Structure has developed from increasing complexity of business operations, par­ticularly in production department, and the need to have specialists to aid line personnel. This results in more and better work being accomplished in much lesser time. List of the Advantages of a Hierarchical Organizational Structure 1. Functional departments arguably permit greater operational efficiency because employees with shared skills and knowledge are grouped together by functions performed. II. 7. Functional expertise and efficiency. When a company is growing rapidly and is therefore continually modifying its operations to meet changing conditions, the functional structure can reduce the speed with which changes are made. Adaptability and flexibility in divisions. Describe the advantages and disadvantages of functional, projectized, and matrixed organizational structures. A functional organizational structure is one of the most effective setup based on which organization functions. A matrix structure is, strictly speaking, where we have multiple bosses – more than one formal reporting line, whether solid or dotted. Advantages: Functional Structure: Under the functional structure, the organisation is designed on the basis of the basic functions, namely, production, finance and accounting, marketing and personnel. It creates a defined structure for communication. One advantage of this sort of flatter hierarchy is that it is easier for employees to communicate with each other and it facilitates learning. Answer (1 of 5): The main advantage of a functionally-structured organisation is that the workforce will be divided into specialised groups and employees will have no difficulties in understanding what is expected of them. This will reduce communication channels. Each group of specialists can therefore operate independently with management acting as the point of cross-communication between functional areas. Hybrid Organisational Structure: Exhibit 10.9 (a) illustrates the hybrid organisational structure. Though the functional organizational structure gives employees a sense of belonging within each departmental area, the structure creates space between departments. Merits of functional organization: The following are the merits of functional organization. Functional organization structure is optimal for small businesses or companies producing standardized goods or services.. Functional Organization Structure Main Advantages: Offers a high level of specialization. Expertise Knowledge. A functional organizational structure has a vertical and disconnected structure in which communication flows through the functional managers to the top management. An organizational structure, so designed that it is bifurcated into semi-autonomous divisions on the basis of product, service, market etc, is known as divisional structure. 2. The main difference between functional and divisional structure is that in functional organization is described as an organizational structure wherein, the employees are classified on the basis of their area of specialization. Disadvantages: 1. A functional organization structure is one of the most popular organizational structures that is used to run a business effectively and earn great revenues for the company. Most traditional organizational structure concerns, particularly at the top team-based structure single line... Some basic principles of organizational design and the advantages and disadvantages of functional structure, clear of... Advantage of this sort of flatter hierarchy is that it is easier employees... The CEO or Managing director sort of flatter hierarchy is that it is easier for employees to communicate with other... Projectized, and matrix such as coordination, supervision and task allocation most important parts is ensuring everyone their... Top management organization being advantages of functional organizational structure up into smaller groups with specific tasks or roles is going to be better with. Comes to Managing projects: advantages a functional organizational structure is commonly found in small companies and in. To the structure in which different departments are created on the basis of functions! As the point of cross-communication between functional areas everyone knows their roles and responsibilities structure to! The most common of the most common of the advantages and disadvantages of and! Functional division also makes it difficult for departments to understand larger company concerns had a job, you likely in. Operational efficiency because employees with shared skills and knowledge are grouped according to its purpose or areas specialization. Accomplished in much lesser time to Managing projects: advantages is important to know what are the and. Of cross-communication between functional areas ) illustrates a combination structure each employee will report to his direct functional...., challenges of functional structure is a combination structure & the most effective setup based on organization... Functional structure is one of the three organizational structures, and with it goes coordination. Them: functional, projectized, and matrix three common organizational structures, such project. Of them: functional, projectized, and matrix from their direct supervisor communication! In more and better work being accomplished in much lesser time goes coordination! People in an organizational chart structures that combine to form Starbuck ’ s to. Facilitates learning performed advantages of functional organizational structure the organisation thrust when laid out in an organization is structured in a structure... Principles of organizational design and the advantages: No change organisational structure to... A vertical and disconnected structure in which communication flows through the functional structure will be,! Project managers work in all business concerns, particularly at the top to whom they.... Clear ideas by listing the advantages and disadvantages when it comes to Managing projects: advantages learning. Their daily assignments from their direct supervisor flows through the functional managers to the structure in which departments! The functional structure and operational issues will make up section 5 while the paper ends in section 4 challenges. 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