The functional structure gives you the least power as a project manager, but offers plenty of other advantages: It works well for small teams and small projects because the function has full control over the team members and other resources required. This streamlines communication and reduces confusion among employees. This helps to prevent duplication of work. Another one of the advantages of a functional organization design is that it provides a very specific career ladder for participants. Employees are highly skilled, and as they are proficient in a particular type of work, it is easy to perform above par because all their energies are focussed on a single goal. Advantages and Disadvantages of Line Organisation 2. Advantages and Disadvantages of the Functional Organization Structure. Functional organization makes for clear lines -- lines of communication, lines between departments and jobs, and the line that is the chain of command. Unlike teams where members serve in drastically different capacities, like a graphic designer and copywriter working together, group members in a functional structure have expertise in similar areas, and can push each other to greater heights. The advantages of the functional organization are as follows- 1. This will reduce communication channels. Staff working skills can be effectively improved. Let’s try to clear ideas by listing the advantages and disadvantages of this organization. 1. Staff working skills can be effectively improved. Matrix Structure. Similarly, in a centralized government structure, the decision-making authority is concentrated at the top, and all other lower levels follow the directions coming from the top of the organization structure. Both functional and project manager roles can be outlined in the matrix organizational structure. There are several advantages of functional structure too. The advantages of a functional organizational structure. Advantages and Disadvantages of Functional Organizational Structure In this type of organization, the emphasis is on managing some functions wherever the function may be performed in the enterprise. 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. A clear chain of command is important because it creates standard operating procedures, established consequences and enhanced accountability. Because a functional structure groups people performing similar tasks that require certain skills, more experienced or talented group members serve as examples and mentors to individuals with less experience. 2. One of the oldest and most traditional structures is a functional structure. The Functional Organization Structure can be successfully applied in many areas. This leads to continuous growth and development within the organization from simple day to day interaction, instead of having to rely on specialized seminars or workshops to improve the quality of work coming out of a department. The team members work with other people in the field and it allows sharing of thoughts and knowledge to make the people learn new skills. After reading this article you will learn about the advantages and disadvantages of different types of organisation:- 1. When employees who have similar skills and experiences are grouped together, it makes production more efficient and of a higher quality. The matrix structure is a type of organizational structure in which individuals are … A clear chain of command Functional managers oversee entire departments of an organization. 5. This gives them better insight and credibility when they make their evaluations, and can allow them to offer more constructive feedback because they have a firsthand understanding of the jobs the individuals being evaluated are performing. There Is Proper Authority and Control Over Employees. Within each functional unit, employees of related specialties work together, providing for ease of information sharing. Demerits of Functional Organization: The functional system is not an unmixed blessing. It's your ultimate org chart tool which is advanced, easy and affordable. For example, a photo department and graphic design department may fall under the purview of a visual arts department under the purview of a marketing department within a larger corporation. The advantages of a functional structure range from better skill development to specialized results throughout the organization. Work is not duplicated as all departments have defined responsibilities. Employees are grouped by their skills. The functional structure is one type of organizational structure that helps companies manage employees and meet their business goals. Advantages and Disadvantages of Staff Organisation 3. 15 Matrix Organizational Structure Advantages and Disadvantages Sep 25, 2018 Oct 24, 2018 by Brandon Gaille When a matrix organizational structure is implemented within the workplace, then there are cross-business, cross-functional units which are working together. 6. 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. An effective centralization offers the following advantages: 1. A disadvantage is that employees are responsible to their project team as well as to … 3. Because the staff belongs to a department specialized in an area. Their roles and responsibilities are fixed, facilitating easy accountability for the work. Employees are possible to become experts. As the saying goes, steel sharpens steel, and coworkers in a functional structure can sharpen each other's skills. The roles and responsibilities are specified. section 3, advantages of functional structure will be discussed, in section 4, challenges of functional structure and operational issues. Org Chart Creator provides the best org charting service. 4. Because everyone in a functional structure is operating in an area of expertise with peers of similar expertise, their contributions to the overall goals of a company or organization will be more specialized. In a hierarchical structure, functional interaction ladder ascends from top level management. For example, the person heading the IT department will have the education and skill necessary to shoulder this responsibility and successfully run his team. The last advantage of Functional organizations is that they define clear career paths for the staff. Here are some examples of the most typical fields where the functional structure is used: One of the advantages of a functional structure is the positive atmosphere it provides for skill development. As such, individuals attaining a supervisory role are more likely to have had experience in the tasks they are evaluating their employees on. Reviewed by: Michelle Seidel, B.Sc., LL.B., MBA. The following are a few benefits of the functional organizational structure: 1. Roles and tasks do not change very much so there is little time spent learning, and accountability is clear. It will lead to poor communication and coordination across functional units. A Functional organizational structure has several advantages and disadvantages when it comes to managing projects: Advantages. Functional Organization Structure Main Advantages: Offers a high level of specialization. Advantages of Functional Organization: Functional organization has the following advantages: 1. The hierarchy is clear. Outlined in a grid fashion, the functional managers and project managers are role-specific and are included within the matrix. Employees are grouped by their knowledge and skills, allowing them to achieve high performance. A main advantage of a functional organization is that it has a a very concrete chain of command. A main advantage of a functional organization is that it has a a very concrete chain of command. 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. Advantages and Disadvantages of Functional Organisation 4. Employees do not report to multiple managers. Advantages of Functional Organizational Structure The employees are made into groups according to their skills, and thus the overall effectiveness and efficiency of the tasks increase. Since the hierarchy is simple, employees know the one manager they are to answer to, instead of multiple people. Lauren Nelson was a nationally recognized public speaker and debater for eight years and has three years of contracted technical writing under her belt. Functional structures in organizations can speed up the decision-making process. In turn, productivity occurs on a more proficient basis. The execution of the said instructions also becomes easier. Advantages And Disadvantages Of Functional Organization 1174 Words | 5 Pages. Communication is frictionless within the department. This is the capacity to move from centralized bureaucratic structures to interrelated but self-governing project teams. Advantages and Disadvantages of Committee Organisation. 3. The benefits of the functional organization structure made it spread widely in the contemporary management. Main Advantages of Functional Organization Structure. Within the pyramid, departments are assigned with clear roles, responsibilities, and goals. 4. This increases the performance of the team. The workers have the advantage of getting instructions from specialists. Usually, group decision-making can slow down progress on projects because of the diverse perspectives involved. The reporting hierarchy is well defined and employees don’t have to report to multiple mana… 2. Advantages of Centralization. Advantages of A Hierarchical Organizational Structure 1. Without such leadership qualities it is impossible to attain the same degree of success, due to the following disadvantages: 1. Employees are possible to become experts. 3. Specialization: This type of organization has the benefit of having specialists in each area. Equal Weight age to All Functions: It ensures that all the functions/activities get equal weight age. II. The following are some advantages of the functional organization structure: 1. People understand boundaries, who answers to whom and who takes the blame or credit for results. Firstly, when the specialist workers of a particular field are in a group together in a functional division, there are high chances that the function will be successful and the organization will be successful, ultimately. Functional specialization can minimize the cost of operation. The major disadvantages of functi… While people will still have differing perspectives under functional structures, similar professional and educational backgrounds offer more common ground than not, theoretically making the decision-making process much easier to navigate. Employees are highly motivated as they see clearly their career path within the functional units. Lumen Learning: Common Organizational Structures, UpCounsel: Functional Organizational Structure: Everything You Need to Know, AccountingTools: Functional Organizational Structure. The hierarchical structure makes it easy to identify promotional paths for employees, providing an additional motivating factor for the workers. Each employee will report to his direct functional manager. You can easily access the experts you need because they are in the same functional area. Copyright 2020 Leaf Group Ltd. / Leaf Group Media, All Rights Reserved. Advantages of Functional Organizational Structure The executive or the team leader has the knowledge and experience of that particular field. Advantages of the Functional Organization Structure. The advantages are: Efficiencies. The most obvious advantage of a functional organization is that grouping employees by specialization ensures a dependable level of departmental competence. There is easy accountability for each employee and thus employees get their reward through a fair and just practice. Every business or organization is structured differently, depending on its needs and goals. Spurring innovative ideas. ” Projectized Organization “ Nowadays, many organizations operate in an effective environment that they tend to focus on the outcomes of the project by using different management approaches. For example, a photo department and graphic design department may fall under the purview of a visual arts department under the purview of a marketing department within a larger corporation. It is said that cross-functional team is a calculated investment for teams … Leads to high-quality technical problem-solving. This increases efficiency by eliminating guesswork and duplication of effort. It results in optima… Moreover, the streamlined hierarchy facilitates more authoritative decision-making, which requires far less deliberation most of the time. Remedies of functional and operational issues will make up section 5 while the paper ends in section 6 conclusion. The lines of authority seen in functional structures provide for clear channels of communication and clear expectations about who reports to whom. Let’s start with the advantages: Absence of Unity of Command Employees and department managers are skilled because they are experienced in the same field of business. Under this system, individuals with similar jobs and skills are grouped together into productive units with a hierarchical reporting system. One advantage of the matrix organizational structure is that people across different functional areas have a better understanding of their coworkers in other areas. Functional Organization The advantages of Functional Organization: The team is managed by an experienced person with a high ability and skills who can adequately understand and review the entire work. The highly-efficient linear structure helps to give clear instructions to every employee within the department. The advantage of these clear-cut delineations lies smoother management. Each employee has a fixed job definition. 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! The work is performed by those who have the specialist knowledge of that work. Functional organization structure This system, of course, works very well under a dynamic leadership. And improving skills, knowledge, and competence in that specialization can be proposed as a career path for the resource. In this article, we discuss the advantages and disadvantages of the functional structure, plus learn about other organizational structures in business. All the individuals or workers are grouped on the basis of their similar know-how and skills. could enhance the work efficiency and productivity due to the specialized skills and technology. When an organization is structured in a functional way, it is important to know what are the advantages and disadvantages of this choice. Functional organization structure is optimal for small businesses or companies producing standardized goods or services. 2. Nelson is a graduate of Western Kentucky University with a Bachelor of Arts in corporate and organizational communication and is currently serving as Director of Communications for Attain Capital Management. Of the following advantages, the first one is the most important; the functional structure can introduce a great deal of efficiency into the operations of a business. This reduces the number of communication channels. Copyright OrgCharting 2004-2016; All Rights Reserved. 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