Benefits & Disadvantages of a Functional Organizational Structure. Easy Org Chart Creator – Powerful & Economic Choice for Your Business, Org Chart Template: Essential Ones for Your Work, Org Chart Software: The Ultimate Guide for You, Dropbox Business Org Chart: Check the Magic Figures. Copyright 10. With so much management, bureaucratic structures have strong boundaries. The disadvantages of Functional Organization: * The functional organization may have unhealthy competition working with the other areas. Departm… If employees and managemen… Content Guidelines 2. A Functional organizational structure has several advantages and disadvantages when it comes to managing projects: Advantages. It is very useful where it is desired to introduce specialisation in the performance of various functions like production, finance, marketing, etc. This organisational structure relates to an organisation which has outgrown the entrepreneurial stage. Job descriptions are detailed and specialized. Each employee specialises only in a small part of the whole job. Absence of Unity of Command. 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 … One advantage of this sort of flatter hierarchy is that it is easier for employees to communicate with each other and it facilitates learning. If promotions are not handled well, an employee may be discouraged if a lower performing peer is promoted over them. This can result in mismanagement and discord. Problems may arise among management if department heads are only focused on their department and do not communicate effectively with other departments. To satisfy their ego every one demands maximum resources for their department. Advantages and Disadvantages of Functional Organizational Structure. Image Courtesy : The specialization will lead to a narrow viewpoint and lack of overall perspective. 3. Taylor, who is known as the father of scientific management developed the concept of “Functional Organisation”. Advantages & disadvantages of functional structures Advantages . Let's take a look at the advantages and disadvantages of each so you know what you're up against when you join a new structure. It's your ultimate org chart tool which is advanced, easy and affordable. Disadvantages of divisional structure Small organizations. The workers have to obey the instructions of many foremen. Without such leadership qualities it is impossible to attain the same degree of success, due to the following disadvantages: 1. Each one of them becomes a small company in itself because of the number of people working in it. For example, a company could have human resources, marketing, operational and finance departments. 1. Functional organisation is highly suitable for an enterprise engaged in production and distribution of a single product or a small number of products. Disadvantages of Functional Organisation: 1. The disadvantages of the functional organization are as follows- 1. Organizations may choose from a number of common operating structures. … The advantages and disadvantages of a hierarchical organizational structure involve communication, innovation, and collaboration. After a while, the employees may start feeling monotony or boredom. Disadvantages of Functional Organizational Structure. In this structure, the manager must take care of the appraisal system. This decreases the overall efficiency of the employee. Existence of too many cross relationships leads to complicity which creates overlapping, confusion and conflicts. 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! … There may be a lack of understanding as to how significant that specific are to the company. 2. Every superior considers his work important and wants the workers to give top priority to his assignment. Functional Organisation F.W. There may be a lack of understanding as to how significant that specific are to the company. In the functional structure, such as shown in the following Facebook organizational chart, functions are separated into different groups, resulting in some defects. A functional organization groups workers together and has a hierachial reporting system. Copyright OrgCharting 2004-2016; All Rights Reserved. As. Grouping jobs by function breeds certain economies. Divisional structure is not a possibility in small organizations. Rather than duplicating roles in different parts of the company, similar activities are grouped together so leading to: lower costs ; standardisation of output/systems, etc. One of the oldest and most traditional structures is a functional structure. TOS 7. Benefits & Disadvantages of a Functional Organizational Structure. The disadvantages of Functional Organization: The functional organization may have unhealthy competition working with the other areas. The advantages of functional organization structure. One manager would be … Disadvantages of Functional Organization. According to name, functional organisation implies that the organisation ought to be based on various functions. Org Chart Creator provides the best org charting service. There must be strategies in place to deal with the potential negatives which like to occur under this structure. Lack of Fixed Res… The 6 key advantages and disadvantages of a matrix organization. Authority is centralized instead of spread out among employees. In this article, we are going to review the advantages and disadvantages of each organizational structure: Functional, Projectized, and Matrix. For example, to establish its image, the production department may produce quality product ignoring the fact that market trend favors accepting medium quality product. Every business or organisation is structured differently, depending on its needs and goals. Management can monitor outcomes, which lends itself to standard products or services and quality control. Conflict amongst Foremen: Under this type, foreman of equal rank will be many in number and this may lead to conflict among them. This will reduce communication channels. Disadvantages of a functional organizational structure Lack of attention. Show More. Prohibited Content 3. Content Filtrations 6. The lack of new challenges can make them unenthusiastic for the job at hand. As the company starts growing, the departments also become larger. Outlined in a grid fashion, the functional managers and project managers are role-specific and are included within the matrix. Cooperation and communication between departments and units may be poor. If you want to learn more about organizational structure types in Project Management you should check out our 100% Online and Self-Paced Project Management Professional Certification Training . 2. 3. This situation leads to conflicts among the various departmental heads. Functional managers oversee entire departments of an organization. The organization may produce a variety of goods and services, and they might be operating in several regions, but they still do not have the resources to run so many different divisions and have the employees of same level in each division. They always give more importance to their departmental objectives. Disadvantages In functional organization, each group perform their duties independently from other functional groups, but sometimes that can fail. It will lead to poor communication and coordination across functional units. Ignorance of Organisational Objectives: Each departmental head works according to his sweet will. They focus more on their own goals and neglect the overall company objectives. There is a very low level of communication between the two departments, and it results in po… 5. It is the most widely used structure because it is the simplest and least expensive of the seven alternatives. Slow to react in response to environmental changes. Some of the disadvantages of interrelationships between organizational functions are – 1. Employees may find it boring to repeat the same task over and over, and become less enthusiastic over time. Related. Disadvantages of the Functional Organizational Structure Since the employees are grouped by their knowledge and skills, competition may arise between them. Discipline – Since workers have to work under different bosses, it is difficult to maintain discipline among them. 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… Disclaimer 9. (2) Difficulty in Interdepartmental Coordination: All departmental heads may work as per their own wish. Every departmental head wants to become a functional empire. The autonomy within units might increase when the company grows, which cause difficulties in management. When nearly similar skilled people are working together, conflicts may arise when one employee is promoted whereas others are not. Demerits of Functional Organization: The functional system is not an unmixed blessing. Main disadvantages of functional organisation: (1) Ignorance of Organisational Objectives: Each departmental head works according to his sweet will. Speed of Action: As control is divided among the various specialists, the speed of action is very much hampered. 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. Sabre Corporation Case Study 1281 Words | 6 Pages. Plagiarism Prevention 4. 4. The matrix structure is a type of organizational structure in which individuals are … For example, the total work activities of an enterprise may be divided into various functions like purchases, production, marketing, finance, quality control. Here are the major disadvantages you must consider: Main Disadvantages of Functional Organization Structure. Matrix Structure. Lack of Co-ordination: There are several functional experts in the organisation and this may create the problem of coordination. 2. Conflict in Authority: ADVERTISEMENTS: The principle of ‘unity of command’ is violated in functional organization. This video outlines the 6 key reasons why organizations introduce a matrix and the importance of communicating these reasons clearly. ii. Over time, bureaucracies develop many rules to maintain the structure. Generally, the functional manager has more authority than the … Disadvantages of Functional Organization: Following are the disadvantages of functional organization: 1. Chains of command are clear, as are expectations and decision-making power. It will lead to poor communication and coordination across functional … This system is a hurdle in the way of the complete development of the employees. Taylor’s functional/practical approach is based on principle of specialization and tries to cover up the organisational balance. Hence, overall organisational objectives suffer. In the long term, employees tend to feel bored and the monotony of the job can be off-putting. Privacy Policy 8. Disadvantages of Functional Organisation: Following are the disadvantages of functional organization: i. Functional Organizational Structure In a functional organization structure, the project manager and all the resources work in the same company division, such as the sales and marketing department. This can cause poor communication and \"silos\" that are too independent from one another. Employees do not report to multiple managers. Lack of teamwork and reduced flexibility may cause conflicts between departments and units. No doubt this facilitates coordination within the department but it makes interdepartmental coordination difficult. Lauren Nelson - Updated April 17, 2017. The work can be quite one dimensional. 5. 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. A variety of different structures are utilised today. A functional organizational structure is – in general – more suitable for projects that require greater technical experience. There will be lack of understanding across departments. Functional organizational structure, also referred to as centralised structure is one of several reporting structures a company could implement. 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. In this type of organization, the emphasis is on managing some functions wherever the function may be performed in the enterprise. The functional organizational structure groups employees according to broad business activities, resulting in departments such as finance, marketing and production. This system, of course, works very well under a dynamic leadership. The inter-department communication is very poor this creates an overall lack of growth as an organization. 3. Each employee will report to his direct functional manager. It stifles innovation when the problem occurs or environment changes. Before publishing your articles on this site, please read the following pages: 1. Report a Violation, Functional Organisation: Useful notes on Functional Organisation, 6 Important Advantages of Functional Organisation, 4 Important Advantages of Divisional Organisation. As projects are managed by multiple functional managers, clients may not get the right status of the project. As principle of unity of command is not followed, there are conflicts among staff experts and line executives leading to physical and financial loss. Disadvantages of a Functional Organizational Structure. Discipline: Since workers have to work under different bosses, it is difficult to maintain discipline among them. A subordinate is answerable to many bosses. There are powerful reasons to introduce a matrix organization structure – that’s why many of the world’s leading organizations have one. Both functional and project manager roles can be outlined in the matrix organizational structure. Image Guidelines 5. Conflict amongst Foremen – Under this type, foreman of equal rank will be many in number and this may lead to conflict among them. It helps the organization to perform work according to the function, thus avoiding any duplication of work. 2.

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