Strength-Product-based structure helps the employee to emphasize on market sector. Specialization: This type of organization has the benefit of having specialists in each area. Benefits & Disadvantages of a Functional Organizational Structure. 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. These structures are reported to be good for a productive resource coordination. Communication Process: Benefits & Disadvantages of a Functional Organizational Structure. This structure can be rigid and the standardized ways and high formalization can hamper or impede faster decision making. There are only line… Disadvantages of the Functional Structure The functional structure also has inherent disadvantages. Weakness-Resources in product-based structure are not shared adequately across the division. As the organization grows bigger, functional areas become difficult to manage. Advantages of a Functional Structure The project … In the functional structure, such as shown in the following Facebook organizational chart, functions are separated into different groups, resulting in some defects. 2. Employees tend to spend a significant percentage of their time with nothing to do, sometimes literally begging for work. After a while, the employees may start feeling monotony or boredom. If an organization gets larger, it will be difficult t… Advantages and Disadvantages of Functional Organization ... functional organization has both advantages as well disadvantages and any company thinking of adopting this type of structure should carefully analyze both the aspects and then take the decision. 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. Functional The result is reduced work related strain, reduced stress of overwork and increased efficiency. Each functional manager is able to report on his part of the project. 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. Disadvantages 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. Let’s try to clear ideas by listing the advantages and disadvantages of this organization. Cooperation and performance within each division is increased as a result it encourages competition between each department. There was the greater demand for the mental and physical capabilities of the CEO. The merits of functional organisation are as follows: (1) Specialisation—It ensures a greater division of labour and enables the concern to take advantage of specialisation of functions. 4. Categorized: Organizational Structures. Another weakness of functional organizational structure is there could be lack of unit coordination. 3. Organizational structure: types of organizational structures (line organizations, line-and-Stuff organizations, committee and matrix organization). Disadvantages of the Functional Organizational Structure. When employees are given the flexibility and freedom to make a difference, they feel empowered and end up delivering high quality work. Employees do not report to multiple managers. Since the employees are grouped by their knowledge and skills, competition may arise between them. The matrix organizational structure is a combination of two or more different kinds of organizational structures, such as project management or functional management. A disadvantage is that employees are responsible to their project team as well as to their functional areas. As a single division does not produce enough to take great benefits out of the economies of scale. The work is performed by those who have the specialist knowledge of that work. Outsourcing payroll also enables them to focus on processes and strategies that directly affect the business future. Enhanced productivity and quality of work; generally, all employees need to feel that they contribute to the well-being of the organization. Conflicts between functional managers can have drastic effects on the progress of a project. It will lead to poor … Features of Secondary Market. As a result, single division trends to only concern about their own duties and tasks. Disadvantages of functional structure. In addition, it fulfills customer demands more effectively and widen the knowledge of the workers. Advantages: The lack of new challenges can make them unenthusiastic for the job at hand. The Tempest was suffering the consequences of centralized decision making, where all the pacing decision was. In a decentralized approach, the employee will feel more comfortable and their productivity will be increased. The inter-department communication is very poor this creates an … Problems may arise among management if department heads are only focused on their department and do not communicate effectively with other departments. Divisional structure prevents organizations from getting the most out of economies of scale. Functional Structure of an Organization: Advantages, Disadvantages & Example The Boundaryless Organization: Structure and Advantages 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. In a projectized structure, all the work is looked at as a project. This will reduce communication channels. Since the employees are grouped by their knowledge and skills, competition may arise between them. Tagged:advantages and disadvantages, functional organizations, What Is the Difference Between Project-driven And Non-project-driven Organizations? Cooperation and communication between departments and units may be poor. A line organisation has only direct, vertical relationships between different levels in the firm. Which organizational structure works the best for the company’s overall sustainability. Cooperation and communication between departments and units may be poor. 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