34. An organisation is working by …

Functional Structure

As the name suggests, in a functional structure grouping is based on functions. This means that similar jobs are integrated into functions and major functions are further categorised as departments which are handled by respective coordinating heads. These departments can further consist of sections

Advantages

• Since functional structure revolves around functions, the division is such that an employee performs a specific set of tasks as a part of his routine. Effectively, this creates room for job specialisation and efficient use of manpower.
• Again, as similar tasks are grouped together into a function and emphasis is laid on specific functions, this structure facilitates coordination and control.
• In a functional structure, we keep similar tasks together and different tasks away. This implies that there is no scope for duplication. Effectively, this lowers cost.
• As the focus is mostly on a specific and limited range of skills, training of employees becomes easier.
• This also leads to an increase in managerial efficient which in turn increases profit margins.
• Lastly, it ensures that all the diverse tasks get a fair amount of attention.

Disadvantages

• A major drawback of the functional structure lies in its definition itself. As stated already, it puts emphasis on division based on functions of an enterprise. Now as it stresses on the diverse functions, it generally leads to an increased concern on interests of departmental interests rather than the interests of the organisation as a whole. Technically, this can lead to the emergence of functional empires and even dwindling levels of concern for organisational objectives.
• Again, as the departments are completely different in operations from each other, there is a big barrier to communication between them.
• There may arise a conflict of interests among these departments which are profusely looking to fulfil the individual departmental interests. Such conflicts can hinder the growth of an enterprise. Further, such conflicts can further arise in the absence of clear separation of responsibility.
• When individuals always deal with specific tasks their perception narrows down and they don’t appreciate the varying point of views.  Consequently, they remain fixated on specific ideas and fail to develop as individuals. All in all, this leads to inflexibility.