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. This departmentalization allows greater operational efficiency because the employees have their skills and knowledge to be shared within the group. A disadvantage is that employees are responsible to their project team as well as to their functional areas. As. Advantages of a Projectized Organizational Structure – The project team members directly report to the project manager which enables decision making faster. Features of a Projectized Organizational structure: Related: Top 15 Characteristics of Creativity (Creativity as a skill). Functional structure also has some disadvantages like in this structure the need of the organization of its growing product line is strained because skills and abilities of employees are narrowed. Related: 11 Nature and Scope of Marketing (With Examples). Advantages And Disadvantages Of Organizational Structure In An Organization 1088 Words | 5 Pages . A functional manager tends to create boundaries around himself and thinks only in terms of his own department rather than the whole enterprise. The vertical separation of divisions and teams can lead to the creation of 'organisational silos'- a mindset where one team hesitates to share information or knowledge with other teams within the same organisation. Also learn about its advantages and disadvantages! In a hierarchical structure, functional interaction ladder ascends from top level management. Function authority remains confined to functional guidance to different departments. This can create some conflict. Problems may arise among management if department heads are only focused on their department and do not communicate effectively with other departments. ADVERTISEMENTS: Organizational Structure: Functional Structure and Divisional Structure ! The Functional Organization Structure can be successfully applied in many areas. This decreases the overall efficiency of the employee. Management Square Ltd : Flat 40 Nant court, Granville Rd, London NW2 2LB, UK. For the division of work into various departments. The staffers have the chance to get promoted within their functional areas which can be a reason for them to stay long term. 5. Thanks so much for your work. For example, the total work activities of an enterprise may be divided into various functions like purchases, production, marketing, finance, quality control. Slow to react in response to environmental changes. Organizations may choose from a number of common operating structures. There are several types of corporate structures (organizational structures), and organizations choose the one most suitable for them. Advantages and disadvantages of functional structure. The advantages and disadvantages of a matrix organizational structure make it easier to move resources to the most important projects which need to be completed. Chris Joseph - Updated February 06, 2018 . There may be a lack of understanding as to how significant that specific are to the company. What is a Functional Organizational Structure ? Communication in organizations with functional organizational structures can be rigid. For example, the total work activities of an enterprise may be divided into various functions like purchases, production, marketing , finance, quality control. A functional organizational structure is a structure used to organize workers. There is pointed supervision in the enterprise, and every function in charge looks after his functional area only. Management Square France :3 Avenue de Touraine, 78310 Maurepas, France. 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. The functional structure is one type of organizational structure that helps companies manage employees and meet their business goals. One of the advantages of a functional organization is that grouping employees by specialization ensures that employees are dependable and it also creates a health competent work place. Functional structure is helpful up to a certain limit of expansion and growth. When organisation grows into unrelated products and services for different markets then it is difficult to manage. Another disadvantage of functional organization structure is that these functional groups may not be able to communicate more often which decreases flexibility and innovation. There is a general lack of coordination among the functional executives which causes the delay in decision making. The matrix organizational structure is a combination of two or more different kinds of organizational structures, such as project management or functional management. He will have an official command or formal power finance function and perform it. When shifts in the market environment occur, decisions on how to react come slowly as proposed changes are forced to travel through various chains of command. These challenges are not about the structure or the strategy, they are about the way people work together in the matrix. All managers must bear that there are two organisations they must deal with-one formal and the other informal. All of the companies define its organizational structure to determine the reporting relationships that will exist in the company. The autonomy within units might increase when … Some of the advantages of a functional structure include better skill development, a clear chain of command, expedited decision making, qualified supervision and specialized organizational results. The basis of this functional organization structure is an arrangement where a worker has different managers for different areas of the organization operation. Divisional Structure Functional Structure: This is the simplest & the most prevalent form of organizational structure. There are powerful reasons to introduce a matrix organization structure – that’s why many of the world’s leading organizations have one. … This creates confusion in the Enterprise. 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. It helps to bring in-depth knowledge and skill development among the employees to achieve the goals of the company. Lack of Co-ordination: There are several functional experts in the organisation and this may create the problem of coordination. Discipline: Since workers have to work under different bosses, it is difficult to maintain discipline among them. Each function is managed by a departmental head that has a dual responsibility to be accountable to the top management and to direct the respective department to achieve favorable … This is a functional organizational structure chart. In the long term, employees tend to feel bored and the monotony of the job can be off-putting. Functional organizational structures are not nimble, flexible or easily adaptable. The work can be quite one dimensional. 3. 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