What is a Functional Organization Structure?

Your working style depends on the type of organization in which you are working. In a functional organization structure, you will be reporting to the functional manager. In a projectized organization structure, you will report to the project manager, and in a matrix organization, it depends on the type of matrix ( whether it is a weak matrix, balance matrix or a strong matrix).

In this blog post we are going to discuss the functional type of organizational structure, which is a traditional and most commonly used form of organization’s structure.

Okay, let’s get started…

A Functional Organization structure is a hierarchical type of organizational structure wherein people are grouped as per their area of specialization and supervised by the functional manager with expertise in the same field, so that their skills can be effectively utilized and the organization’s objective can be achieved.

Here, all authority, budget allocation, and decision making power stays with the functional manager. A project manager has no role in this type of structure. Even if he exists, his role will be very limited and he has to ask the functional manager for his requirements. Here, a project manager may have the title of a coordinator or an expeditor.

The Functional Organizational structure is suitable for an organization which has ongoing operations such as manufacturing and production operations.

In functional organizations, the organization is divided into various specific departments; e.g. human resource, marketing, finance, operations, etc. Each department will have its own department head and he will be responsible for the performance of his section. This helps control the quality and uniformity of performance.

Benefits of the Functional Organization Structure: Following are a few benefits of functional organizations:

• Employees are grouped as per their knowledge and skills.
• Workers are very skilled and efficient because they are experienced in same type of work and hence they perform well.
• Job responsibilities and reporting are straight to the functional head, and the hierarchy path is clear.
• Employees feel job security, and therefore, perform without any fear.
• Employees have faith in the organization.
• Employees have a clear career growth path.
• Within the functional department communication, cooperation and coordination is excellent.

Disadvantages of the Functional Organization Structure: Following are a few disadvantages of functional organizations:

• The employee may become lazy due to repeating the same type of work.
• Conflicts may arise due to the promotion of another employee.
• Highly skilled employees cost more to the organization.
• The functional manager pays attention to only his department; he usually doesn’t care for other teams or sections.
• Poor communications and poor inter-department coordination.
• Employees may have little understanding or concern for anything happening outside of their functional area. This may cause obstacles in communication, coordination, and cooperation.
• Functional structure is rigid; therefore, they are very slow to adopt changes.
• Delays in decision making due to bureaucratic hierarchy.

This was all about the functional organization. In next blog I am going to discuss the matrix organization and the projectized organization. Therefore, stay tuned…

image credit => FreeDigitalPhotos.net

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