What are the disadvantages of a functional structure?

Asked By: Zohir Abrosoff | Last Updated: 8th April, 2020
Category: business and finance business administration
4.3/5 (42 Views . 13 Votes)
Main Disadvantages of Functional Organization Structure
  • It will lead to poor communication and coordination across functional units.
  • There will be lack of understanding across departments.
  • They focus more on their own goals and neglect the overall company objectives.
  • Communication in organizations with functional organizational structures can be rigid.

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Furthermore, what are the advantages and disadvantages of the functional structure?

Disadvantages of the Functional Organizational Structure Since the employees are grouped by their knowledge and skills, competition may arise between them. Cooperation and communication between departments and units may be poor. Lack of teamwork and reduced flexibility may cause conflicts between departments and units.

Likewise, what is a functional organizational structure? A functional organizational structure is a structure used to organize workers. They are grouped based on their specific skills and knowledge. It vertically structures each department with roles from president to finance and sales departments, to customer service, to employees assigned to one product or service.

Subsequently, one may also ask, what are the benefits of having a functional organizational structure?

Advantages of a functional structure

  • specialisation - departments focus on one area of work.
  • productivity - specialism means that staff are skilled in the tasks they do.
  • accountability - there are clear lines of management.
  • clarity - employees understand their own and others' roles.

Why is the functional structure so common?

A functional structure is one of the most common organizational structures. While functional structures operate well in stable environments where business strategies are less inclined to changes or dynamism, the level of bureaucracy makes it difficult for organizations to respond to changes in the market quickly.

19 Related Question Answers Found

What is an example of a functional organizational structure?

In a functional organizational structure , an organization's reporting relationships are grouped based on specialty, or functional area. For example, there might be separate departments for marketing, accounting, and engineering. Generally, all the functional heads will report directly to the company president or CEO.

When would you use a functional organizational structure?

The functional organization structure is suitable for a business dealing with operations, like manufacturing industries. Most small industries with only a few products use this structure. The employees are highly skilled due to repetitive work which means high efficiency and the best performance.

What is multidivisional structure?

Multidivisional (M-Form) – Structure – Composed of operating divisions where each division represents a separate business or profit center and the top corporate officer delegates responsibility for day-to-day operations and business-unit strategy to division managers.

What is functional grouping in business?

Functional grouping
Functional grouping is a company structure with a board of directors overseeing a chief executive managing different departments. This is the traditional method of organising a firm into departments based on their core activities such as marketing or finance.

What is a functional reporting relationship?

A functional reporting relationship establishes a connection between positions or organizational units at different management levels based on the specialized nature of the function for which a mutual responsibility is shared.

What is product organizational structure?

Product organisational structure is a framework in which a business is organised in separate divisions, each focusing on a different product or service and functioning as an individual unit within the company.

What are the characteristics of functional Organisation?

What are the characteristics of a functional organization
  • It is a function of the management.
  • It consists of a group of individuals which may be large or small.
  • The group of individuals work under the direction of executive leadership.
  • It establishes definite relationship between the divided units.
  • It is established for the attainment of common objective.

What company uses functional structure?

A functional structure is the one that divides the major functions of a firm into different groups, for example, information technology (IT) department, finance department, marketing department and production department. Airtel is a leading telecommunication company in India.

What are the 4 types of organizational structures?

Traditional organizational structures come in four general types – functional, divisional, matrix and flat – but with the rise of the digital marketplace, decentralized, team-based org structures are disrupting old business models.

What is the main role of the functional manager?

A functional manager is a person who has management authority over an organizational unit—such as a department—within a business, company, or other organization. A general manager is responsible for all areas and oversees all of the firm's functions and day-to-day business operations.

What is functional structure and divisional structure?

Functional Structure is one in which the reporting relationships of the organization are bifurcated according to their functional area. An organizational structure wherein the organizational functions are classified into divisions as per product or service lines, a market is called Divisional Structure.

What is simple structure?

A simple structure is defined as a design with low departmentalization, wide spans of control, centralized authority, and little formalization. When the company begins to expand then the structure tends to become more complex and grows out of the simple structure.

What is a team structure?

Team structure refers to the composition of an individual team or of a multi-team system. Team structure is an integral part of the teamwork process. A properly structured patient care team is an enabler for and the result of effective communication, leadership, situation monitoring, and mutual support.

What is a functional matrix structure?

In a functional structure, there is a little scope of change in the way they work. They can have an efficient and flexible structure. The projectized and functional structures represent the two extreme points of a string, while the matrix organizational structure is a balance.

What is a functional chart?

A functional, top-down organizational chart reflects a traditional business structure. The structure is divided into traditional departments like IT, marketing, finance, human resources, and operations based on everyone's functional role in the organization.