Among the numerous types of organization management structures, the functional organizational structure finds its place.  An organization needs structure for achieving common goals – the functional model is structured hierarchically with a strong concept of subordination.  Most companies in the modern era rely upon this functional/hierarchical model (cf: Matrix organizational structure ).

Functional Organization Structure

In the functional organization, each job becomes the focus point. Similar function-based jobs done by the employees are put together in silos in the functional structured based organizational. Specialization is centralized and employees who are doing these specialized jobs are clustered, thus each unique department is born.

The functional areas will have personnel with varied skills, but those skills are grouped on their similarities. The people who have identical skills can be grouped easily and they can be placed in separate units and a aforesaid organizational structure is formed. The ultimate controlling authority coordinates with all levels which are commonly called the top management. When an organization handles a solitary product, the aforementioned functional organizational structure is most suited and most frequently used.

In such as model, the purchasing function concentrates on purchase activities. Human Resources personnel handle the hiring, training, and firing activities. The accounting department takes care of financial activities. Manufacturing focuses on rolling out the finished product. The sales team takes the role of promoting the finished product in the marketplace. Marketing activities market the product with a long range goal of staying competitive in the market.

The organizational structure with functional focus tries to allocate the available people according to their roles, forming what is referred to as a functional department. Each department usually has a department head with the title of department manager, or something similar. At times, these department heads may be given a title of Director, if the board gives their function such a representation.

Imagine that a functional organizational structure operates in silos, due to the controlling nature used in such structures. When project management is necessary, each project is performed inside a single departmental unit. In the necessity of drawing information or efforts from other departments occurs for project management, it is done by requesting assistance from the other unit. The procedure for getting this cooperation between departments is to route the request through the head of the unit to the other head of the other unit from whom the information is sought. In other situations, the communication flow is restricted inside the functionally silo of the department.

Functional organizational structures are ideal for organizations having a lone product or a cluster of products which can easily group under a single head.

The benefits in utilizing a structure which relies upon the functional model are:

• the chain of command is linear and sound
• The human resource abilities are constantly nurtured by concentrated tutoring, leadership, and guidance
• Professional similarities between the organizational participants in each of the different functional offices
• The development of professional expertise attained by clustering specialists in the present function as a single unit
• Provides an easy path for the employees to grow within the organization sideways as well as upwards in the organizational tree

The drawbacks of the functional organizational structure are

• The decision making process is bureaucratic and far from expedient
• The flow of communication and synchronization between functional departments is complicated
• The speed of resolving problem is slow and inefficient
• Grouping based on functions results in a lack of broader view from employees resulting in narrowed vision of overall organizational objective

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