Functional structure

Functional structure
See also
Grouping of posts Organizational dependence Departmentalization Horizontal organization Tensor structure Organizational structure Boundaryless enterprise Network structure Span of control

Functional structure in his classic approach was proposed by F.W. Taylor as a way to solve the problems of linear structure. Another way was the linear-staff structure. Classic and contemporary functional structures should be clearly separated. Today this name is mostly used for the departmental structure.

In a classic approach it was proposed that the excess tasks of linear managers could be solved by the establishment of a number of officers with different specializations. In this way, each manager could specialize in the selected area, and at the same time, all the issues connected with the organization of workers would be promptly solved.

This solution has its drawbacks. Every employee has more than one superior. For the principle of unity on management has been assigned a new meaning: each employee receive command from only one superior, in his particular area of decision making. E.g. in issues of working time decisions can only be made by one superior. In practice, however, the use of such a solution has proved to be extremely difficult, because the distribution of decision-making powers was not fully achieved. It was therefore possible to receive conflicting instructions from different superiors.

Role of managers in functional organizational structure

Fig. 1. Organizational chart of functional structure

In this structure experts rule, rather than the managers with broad responsibilities. The division of tasks between them is being carried out in a thoughtful and objective way. Thanks to this organization can more easily adapt to changes in the environment.

In addition to the previously mentioned disadvantages associated with the lack of unity of the management, it should be pointed out the lack of the person responsible for the overall functioning of the individual areas of organization. In practice, functional structure adopted different shapes, it was seldom used in pure form.

Examples of Functional structure

• Manufacturing Companies: Manufacturing companies utilize functional structures that are grouped by the type of product that they produce. For example, a car manufacturer may have a functional structure that includes departments such as engineering, production, sales, and marketing.
• Service Companies: Service companies often use functional structures as well. For example, a consulting firm may have a functional structure that includes departments such as human resources, accounting, and client services.
• Non-Profit Organizations: Non-profit organizations also utilize functional structures. For example, a charity may have a functional structure that includes departments such as fundraising, volunteer management, and program management.

Advantages of Functional structure

A functional structure offers many advantages, including:

• Clarity of roles: Each employee understands their role and responsibilities within the organization and can focus on their specific area of expertise.
• Departmental efficiency: Departments can operate more efficiently due to the focused expertise of each employee and the lack of overlapping roles.
• Increased accountability: Each department is held accountable for its own performance as well as the performance of each individual employee.
• Cost savings: By having fewer departments, it is possible to reduce overhead costs associated with managing and maintaining multiple departments.
• Improved communication: By having a more centralized structure, communication is improved within the organization. This allows for more efficient decision-making and problem solving.
• Dedicated resources: Each department has dedicated resources and support that can be used to meet the needs of the organization.

Limitations of Functional structure

The functional structure has several limitations:

• It can be difficult to adapt to changing market conditions, due to the lack of flexibility in the way departments are organized.
• Communication between departments can be slow and inefficient, resulting in delays in decision-making.
• It can lead to a lack of sharing of ideas, as departments can be siloed off from each other.
• It can be difficult to measure the performance of individual departments, as they do not have clear objectives.
• It can create a sense of competition between departments, which can lead to conflict and inefficiency.
• It can lead to duplication of efforts, as each department may be working on the same task with different approaches.

Other approaches related to Functional structure

• The Matrix structure is an approach that combines the features of both functional and divisional structures. In this structure, each employee has multiple bosses, one from the department and one from the project team. This allows for better communication and coordination between groups and more efficient use of resources.
• The Network structure is another approach that is becoming increasingly popular. This structure involves the use of external partners and vendors in order to provide expertise, services and products to the organization. This structure allows for more flexibility and agility in the organization and cheaper costs.
• The Team structure is an approach that is based on the idea of team collaboration. This structure involves teams of employees that work together on projects or tasks, with each team taking responsibility for different parts of the project. This structure allows for better communication and collaboration within the organization.

In summary, Functional structure is an approach that is still used today in many organizations. Other approaches related to Functional structure include Matrix structure, Network structure, and Team structure. Each of these approaches has their own advantages and disadvantages and should be considered carefully when selecting the best structure for an organization.

References

• Fredrickson, J. W. (1986). The strategic decision process and organizational structure. Academy of management review, 11(2), 280-297.
• Galbraith, J. R. (1974). Organization design: An information processing view. Interfaces, 4(3), 28-36.
• Mintzberg, H. (1980). Structure in 5's: A Synthesis of the Research on Organization Design. Management science, 26(3), 322-341.