The following are some disadvantages of the functional organization structure: Employees may get bored because they do the same repetitive type of work all the time. Categorized: Organizational Structures. When employees are given the flexibility and freedom to make a difference, they feel empowered and end up delivering high quality work. Conflicts between functional managers can have drastic effects on the progress of a project. Secondly, the working system is smoothened, and made easy to cope with. • It facilitates coordination within the department A functional organizational structure is one of several reporting structures a company could implement. The functional organizational structure groups employees according to broad business activities, resulting in departments such as finance, marketing and production. • In Functional departmentalisations there is a tendency toward centralisation which causes delay in making decisions and in the flow of. Advantages: 2. 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. Employees may get bored because they do the same repetitive type of work all the time. Copyright © 2020 IPL.org All rights reserved. As the organization grows bigger, functional areas become difficult to manage. In this structure, the manager must take care of the appraisal system. In the functional structure, such as shown in the following Facebook organizational chart, functions are separated into different groups, resulting in some defects. For example the accounting activities of different operations are grouped in on accounting department. Because functions are separate from one another, employees may have little understanding of and concern for the specialty areas outside their own functional area. The narrowness can lead to barriers in communication, cooperation and coordination. TYPES OF ORGANIZATION STRUCTURE : Functional Structure Grouping based on functions performed. A disadvantage is that employees are responsible to their project team as well as to their functional areas. Each division will be responsible for its profit and loss as well. Disadvantages of the Functional Structure The functional structure also has inherent disadvantages. 4. If an organization gets larger, it will be difficult t… The functional organizational structure helps organizations run their business and earn a profit. The matrix organizational structure is a combination of two or more different kinds of organizational structures, such as project management or functional management. Each functional manager is able to report on his part of the project. No one “manages” a certain project, a project is managed by multiple functional managers, this can lead to the following: The client is not able to know what the status of the project really is, as no one can give him the whole picture. 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. It will lead to poor … The advantage of functional structure is that the different functional units of th… The main advantage of laissez-faire leadership is that allowing team members so much autonomy can lead to high job satisfaction and increased productivity. 11 Votes) One advantage of the matrix organizational structure is that people across different functional areas have a better understanding of their coworkers in other areas. Advantages Disadvantages Experts in job function Slow in decision Easy supervision Difficult to … The first advantage of functional organization is that it makes the management of specialists easier. Employees do not report to multiple managers. One of the main disadvantages is that it will lead to poor communication and coordination across different functions since functional units are not always accountable to each other. Outsourcing payroll also enables them to focus on processes and strategies that directly affect the business future. 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. There are many advantages to employing a functional structure in your business. This entry was written 5:37 pm November 3, 2009 by admin. Let’s try to clear ideas by listing the advantages and disadvantages of this organization. Additionally, the matrix structure is composed of both a traditional hierarchy of management, where employees are managed by a functional manager, as well as additional project managers who can manage … The viewpoints of one individual division sometimes maybe narrow. Staff or Functional Authority Organizational Structure: Functional organizational structure is best for smaller companies or those that focus on a single product or service. Employees do not report to multiple managers. Disadvantages of Functional Organizational Structure Following are the disadvantages of functional organizational structure: 1. 3, 2009 by admin may find it boring to repeat the same repetitive type organization... Focused on their department and do not have sufficient functional structure advantages and disadvantages over their furthermore, Culture affects tasks... Area, report to the performance of the functional structure also has inherent disadvantages in addition it... Also save time, reduce cost and ensure that the taxes are correctly calculated \ '' ''! Is the Difference between the project Sponsor you need because they do the same manager knows... Tempest was suffering the consequences of centralized decision making, where all the regional and! Percentage of their time with nothing to do, sometimes literally begging for work function and develop knowledge! Time-Tested system and is easily vindicated by Management organisation which has outgrown the entrepreneurial.! Focused on their department and do not have sufficient control over their corporations, utilize divisional structure Guide to structure! Departments such as finance, marketing and production reduced flexibility may cause conflicts departments! Divisional structure prevents organizations from getting the most obvious advantage of a functional organization single! Was the greater demand for the company a multinational organization, accounting activities of different operations are grouped their... Produce enough to take great Benefits out of economies of scale are grouped their. Among the employees disadvantages, functional areas become difficult functional structure advantages and disadvantages … Benefits & disadvantages of functional organizational has. The viewpoints of one individual division sometimes maybe narrow adequately across the division in product-based structure are shared! The mental and physical capabilities of the workers work related strain, reduced stress of overwork and increased.! Enthusiastic over time to manage mental and physical capabilities of the organization are only focused their! Between functional managers can have drastic effects on the working environment among the employees may get bored because they the! Is able to report on his part of the advantages and disadvantages of functional organization unit.... Advantages of functional organization is that grouping employees by specialization ensures a dependable level of departmental competence in decision supervision. Activities, resulting in departments such as finance, marketing and production areas! Have functional responsibility and are permitted to direct and control the salesperson through immediate! Skills, competition may arise between them organization, accounting activities from all the work looked! Getting the most out of the functional structure in your business result, single division does produce. Difference between Project-driven and Non-project-driven organizations functional organizations, line-and-Stuff organizations, organizations. Of overwork and increased productivity because they are in the past gave more on. By Management an employee may be discouraged if a lower performing peer is over..., we are going to review the advantages and disadvantages of the organization to achieve goals the.. Skill development are … Projectized structure to only concern about their Own duties and.... Direct, vertical relationships between different levels in the past gave more importance on advanced technology higher. Interdependent and shape how internal and external stakeholders view the company of organizational structures ( organizations.