Functional Organisational Structure

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  • Created by: ccorr
  • Created on: 06-05-20 12:53

Functional Organisational Structure

Advantages

  • 1. Departments engage in specialisation- each department is focusing exclusively on one function such as Marketing. Therefore employees and management build up high levels of skills & expertise through repetition & pratice.
  • 2. Clear chain of command- there is a person in charge of each department which improves co-ordination as employees know what is expected of them and when.
  • 3. Clear communications channel- instructions flow downward along the chain of command and information is communicated upward.This can result in important information being communicated quickly leading to quicker decision-making.
  • 4. There is a visible hierarchical ladder, providing career paths for employees (promotion).

Disadvantages

  • 1. Employees can get focused on their own departmental goals and lose sight of the overall business mission.
  • 2. Communications between departments can be slow and subject to misunderstandings.
  • 3. There may be a lack of teamwork- lack of trust between employees working in cross departmental teams. This reduces productivity in the firm.

Evaluation

Larger companies are better suited to use this organisational structure, especially ones that use just a few types of goods or services. A functional organisational structure is suitable for a business dealing with operations, like manufacturing industries. The employees are highly skilled due to repetitive work which means high efficiency and the best performance.

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