Outlined in a grid fashion, the functional managers and project managers are role-specific and are included within the matrix. Company Organizational Structure: Functional vs. Divisional vs. Matrix vs. Flat Organizational structures define the hierarchy or an organization, and determine the way information flows within it . Advantages of a Divisional Structure. Functional Organizational Structure. In your answer, pay special attention to advantages and disadvantages of each structure and discuss them systematically. Divisional Structure: Functional structure is helpful up to a certain limit of expansion and growth. Each employee will report to his direct functional manager. Advantages & Disadvantages of Divisional Organizational Structure. Advantages & disadvantages of divisional organizational structure Chris Joseph - Updated February 06, 2018 Large companies that serve a varied customer base or operate in a number of geographic regions may choose to operate with a divisional structure. If you want to learn more about organizational structure types in Project Management you should check out our 100% Online and Self-Paced Project Management Professional Certification Training . Employees do not report to multiple managers. By pulling resources from these departments to devote to a specific product, location or customer, the divisional organizational structure gains some advantages the functional structure lacks. As with all organizational structure types, the divisional structure offers distinct advantages and disadvantages. Functional Vs. Divisional Organizational Structure. A divisional structure is a common organizational form used in business. Each structure has its distinctive advantages and disadvantages which will run through now. Disadvantages of the Functional Organizational Structure Since the employees are grouped by their knowledge and skills, competition may arise between them. Both functional and project manager roles can be outlined in the matrix organizational structure. It is a type of organizational structure that groups each organizational function into a division. To satisfy ego each demands maximum resources for his division. Since the employees are grouped by their knowledge and skills, competition may arise between them. Advertisements: Related Articles: 6 Important Advantages of Functional Organisation 4 Main Types of Organisation Structure (With Diagram) Advantages and Disadvantages of Decentralisation Types of Organisational Designs: Functional, Place, Product and Multidivisional Design Organisational Designs Types: Matrix, Network, Virtual and Learning Organisations Advantages and Disadvantages … This situation leads to conflicts among the various divisional heads. Multi-divisional structures can be costly. Additionally, companies use more financial resources for distribution, printing and other expenditures when employing a multi-divisional structure. Disadvantages of the Functional Organizational Structure. When organisation grows into unrelated products and services for different markets then it is difficult to manage. The following are the advantages of divisional organisation structure: (1) Development of Divisional Heads: The head of each division looks after all the functions connected with their product that is, purchase, sale, advertisement, production, finance, etc. The divisional structure is a type of organizational structure that groups each organizational function into a division. Disadvantages Functional structure has some disadvantages as well, including: People specialized in certain functions may find difficulties in understanding other functions and hence they are reluctant to change. Key Difference – Functional vs Divisional Structure The key difference between functional and divisional structure is that functional structure is an organizational structure in which the organization is divided into smaller groups based on specialized functional areas such as production, marketing and sales whereas divisional structure is a type of organizational structure where … A matrix structure is superior to a functional and a divisional structure.Please, comment on this statement. As the organization grows bigger, functional areas become difficult to manage. Expansion and growth. Jobs and activities are … This can create some conflict. 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. It helps in the development of varied skills in a divisional head. The following are the main disadvantages of divisional organisation structure: (1) Conflicts between Divisional Heads: Every divisional head wants to establish his supremacy. In simple words, it defines who works for whom and who reports to who. The functional structure describes an organizational structure in which the division of work is paramount. In this article, we discuss the advantages and disadvantages of the functional structure, plus learn about other organizational structures in business. Generally speaking, divisions work best for companies with wide variance in product offerings or regions of geographic operation. In the functional structure, such as shown in the following Facebook organizational chart, functions are separated into different groups, resulting in some defects.Here are the major disadvantages you must consider: Create Your Own Org Charts! The divisional structure is organised around products, projects, or markets. Fast Decisional Making. Functional organization structure is optimal for small businesses or companies producing standardized goods or services. A divisional organizational structure breaks the company down into units that are self-contained and generally independent from one another. A disadvantage is that employees are responsible to their project team as well as to their functional areas. Cooperation and communication between departments and units may be poor. In this lesson, you'll learn about divisional structures, including their advantages and disadvantages. Functional Organization Structure Main Advantages: Offers a high level of specialization. This will reduce communication channels. 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. Well, the best answer in any MBA is class of course it depends. In this kind of structure, different divisions are made to handle different products. The advantage of the product division structure is that a division would get full expertise in handling a specific product. Often, organizations will divide the company into various product departments; however, since my company was in … One advantage of the matrix organizational structure is that people across different functional areas have a better understanding of their coworkers in other areas. The functional structure is one type of organizational structure that helps companies manage employees and meet their business goals. It will lead to poor communication and coordination across functional units. Flexibility. Matrix Structure - Superior to Divisional and Functional Structures. Companies need to employ more managers and employees when using this type of organizational structure. A Functional organizational structure has several advantages and disadvantages when it comes to managing projects: Advantages. Advantages of a Divisional Structure. When establishing a structure, business leaders should decide how a structure best aligns with the company’s principles and goals and how it outlines and sets up tasks for each employee. Without this structure, there would be chaos and inefficiency. Because functions are separate from one another, employees may have little understanding of and concern for the specialty areas outside their own functional area. And that's true here. Benefits & Disadvantages of a Functional Organizational Structure. This business structure is typically found in companies that operate worldwide—for example, Virgin Group is the parent company of Virgin Mobile and Virgin Records. Divisional structure: Divide the organization according to the type of work, region, product and so on. So how do you know which of these three structure types, functional, divisional and matrix is best for your organization? Disadvantages of the Functional Structure The functional structure also has inherent disadvantages. "If the body be feeble, the mind will not be strong" (Thomas Jefferson, 1786). Organizations may choose from a number of common operating structures. Consequently, labour expenses can be higher. Functional Organizational Structure In a functional organization structure, the project manager and all the resources work in the same company division, such as the sales and marketing department. Let's take a look at the advantages and disadvantages of each so you know what you're up against when you join a new structure. Divisional structures developed from the traditional functional structure, which features departments built on related work tasks, such as marketing. Functional managers oversee entire departments of an organization. The narrowness can lead to barriers in communication, cooperation and coordination. Essay topic: Advantages and disadvantages of functional structure. Lack of teamwork and reduced flexibility may cause conflicts between departments and units. Functional structures typically work well for smaller and less complex organizations dealing with only one or a few products or services. One person, alone, can start and run a small business, but when two or more people come together to accomplish a business goal, an organization is formed. Employees are possible to become experts. These days, most large manufacturing organizations have a functional structure. Divisional Structure. As with all organizational structure types, the divisional structure offers distinct advantages and disadvantages. In this article, we are going to review the advantages and disadvantages of each organizational structure: Functional, Projectized, and Matrix. Features of Secondary Market. Advantages and disadvantages of a product division structure . Every company needs an organizational structure, it basically defines the hierarchy of the company. ADVANTAGE OF DIVISIONAL STRUCTURE Product specialisation. 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