Disadvantages of Functional Organizational Structure Following are the disadvantages of functional organizational structure: 1. Here are the major disadvantages you must consider: Create Your Own Org Charts! Functional organization structure ―The importance of structure as a source of influence is so widely accepted that some experts define the concept as those features of the organization that serve to control or distinguish its parts‖, Gibson, Ivancevich, So for example, if in any company which has a functional organization in place and it has divided the department as IT department, finance department, marketing department, purchasing department and so on then any problem related to purchasing department will be handed over or solved by purchasing department only and not by any other department. Following are the important advantages of functional organizational structure: The functional organizational structure helps in achieving the benefits of specialization of work.eval(ez_write_tag([[300,250],'googlesir_com-box-4','ezslot_8',120,'0','0'])); Every functional in charge is an expert in his area and can help the subordinate to perform better in his area. When a company uses this type of structure, it groups its people according to their knowledge and skills which help them become specialists on … 17 Factors Affecting Economic Environment, Privatization: Meaning, Features, Scope, Objectives, 18 Nature and Characteristics of Entrepreneurship, Branch Accounts: Meaning, Definition, Types, 14 Elements of Good and Effective Planning (How its work), External Environmental Analysis: Meaning, Features, Need & Importance, Top 10 Characteristics of Good and Ideal Project Planning, 20 Types of Entrepreneurs (Informative Explained), 18 Key Success Factors in Retail Business (With Examples). Functional authority occupies a Midway position between ‘line authority’ and ‘stop advice’. Moreover, due to the great amount of power of the project manager , it … After a while, the employees may start feeling monotony or boredom. Top 15 Characteristics of Creativity (Creativity as a skill), 19 Factors Influencing Entrepreneurship Development, 12 Qualities of Effective Leadership in an Entrepreneur, 11 Nature and Scope of Marketing (With Examples). There is a general lack of coordination among the functional executives which causes the delay in decision making. Conflict in Authority: The functional structure is one type of organizational structure that helps companies manage employees and meet their business goals. Complexity The operation of the functional organizational structure is, complicated and is not easily Disadvantages In functional organization, each group perform their duties independently from other functional groups, but sometimes that can fail. Disadvantages No one “manages” a certain project, a project is managed by multiple functional managers, this can lead to the following: The client is not able to know what the status of the project really is, as no one can give him the whole picture. On the whole, This type of organization has been quite successfully followed in an enterprise like banks, insurance companies. It creates a high degree of efficiency as the groups of employees and the functional heads perform their Limited and specialized operations. The benefits of the functional organization structure made it spread widely in the contemporary management. Another disadvantage of functional organization structure is that these functional groups may not be able to communicate more often which decreases flexibility and innovation. There may be a lack of understanding as to how significant that specific are to the company. When a decision problem requires the involvement of more than one specialist.eval(ez_write_tag([[728,90],'googlesir_com-leader-4','ezslot_12',115,'0','0'])); Related: 11 Nature and Scope of Marketing (With Examples). 13 Factors Affecting Structure of Sales Organization. In this type of organization, the emphasis is on managing some functions wherever the function may be performed in the enterprise. Difference between Mixed Economy and Socialism, Difference between Fixed and Fluctuating Capital Accounts, Differences between Credit and Debit Card, Difference between Capital and Revenue Expenditure. Notify me of follow-up comments by email. This decreases the overall efficiency of the employee. The lack of new challenges can make them unenthusiastic for the job at hand. Disadvantages of Functional Organization The disadvantages are as mentioned below. Main disadvantages of functional organisation: (1) Ignorance of Organisational Objectives: Each departmental head works according to his sweet will. advantages and disadvantages of organizational structure Uncategorized December 5, 2020 0 Comment Another limitation of the functional organization is that there is increased chances of conflicts among department’s heads due to various reasons like ego, same position, budget and much more which in turn can hamper the progress of the company. Functional organizational structures are not nimble, flexible or easily adaptable. Enter your email below to get access to Our All helpful Tips and Articles, When staff Specialists are incorporated into the organization and are placed upon the same (line) Authoritative level as the line executives. But for the division of work within the departments themselves, The structure has not been found to be very successful mainly because there is no clear line of authority. 4. Your article is very useful for understanding the organizational structure , it contains supporting materials for each specialist. Lack of teamwork and reduced flexibility may cause conflicts between departments and units. Each one of them becomes a small company in itself because of the number of people working in it. 1) No unity of command. When staff Specialists are incorporated into the organization and are placed upon the same (line) Authoritative level as the line executives. There are advantages in terms of efficient use of resources across products and communication moving in multiple directions across the organization , but a potential big disadvantage is that employees have to manage competing priorities from two different chains of command. This creates confusion in the Enterprise. Required fields are marked *. So, for example, a normal person is likely to take more time in taking the decision regarding finance related matter than a financial analyst handling the finance department. Lack of teamwork and reduced flexibility may cause conflicts between departments and units. The employees will be receiving instructions from all 8 foremen which will cause confusion in employees. Employees may get bored because they do the same repetitive type of work all the time. The last disadvantage of the functional organization is that the project manager has little or no authority. It confers upon the holder an unlimited power of command over the people of other departments concerning their function. It will lead to poor communication and coordination across functional units. Hence Disadvantages of Functional Organization: Following are the disadvantages of functional organization: 1. It helps in maintaining ability and uniformity in the performance of functional areas throughout the, Advantages of Functional Organizational Structure. Advantages of Functional Organization 1.Facilitates specialization 2. Disadvantages of the Functional Structure The functional structure also has inherent disadvantages. 3. The disadvantages of the functional organization are as follows- 1. Disadvantages of a Functional Organizational Structure In the long term, employees tend to feel bored and the monotony of the job can be off-putting. Function authority remains confined to functional guidance to different departments. Your email address will not be published. Employees are Expertise The functional organizational structure develops specialists rather than generalists. Advantages and disadvantages of projects in Functional organization Advantages Specialization—It. There will be lack of … Functional Organization Structure Main Advantages: Offers a high level of specialization. It does not face the problem of Limited capabilities of a few line managers. eval(ez_write_tag([[336,280],'googlesir_com-medrectangle-3','ezslot_1',105,'0','0']));One manager would be responsible for each of these functions separately, which means that the finance manager would be responsible for financial activities and would have direct command over all such activities carried out in the enterprise. 2. The structure of an organization determines how employees, teams, and work responsibilities are organized in order to meet final needs and goals. Disadvantages of Functional Organizational Structure. 1. Advantages and Disadvantages of the Functional Organization Structure The Functional Organization Structure can be successfully applied in many areas. It violates the principles of unity of command since a person is accountable for more than one bosses. A number of my blog readers have complained about my blog not operating correctly in Explorer but looks great in Chrome. Operational flexibility 5. This can cause poor communication and \"silos\" that are too independent from one another. There is pointed supervision in the enterprise, and every function in charge looks after his functional area only. This results in a loss of overall perspective in dealing with business problems. There will be lack of understanding across departments. Functional organization, as the name suggests, refers to that organization in which departments are created according to functions or specialization so that any matter related to the particular function is dealt by that particular functional department only and not by other departments. It is a means of putting the specialists in top postings throughout the enterprise. sample functional organizational structure chart. Another benefit of the functional organization is that it enables management to segregate work according to functions and thus avoid any duplication of work and also management can allocate the work to the concerned department quickly due to functional specialization. Cooperation and communication between departments and units may be poor. They always give more importance to their departmental objectives. Disadvantage – Organizational Disunity In theory, organizations pursue a goal or goals as a unified team. Disadvantages of Functional Organisation: Following are the disadvantages of functional organization: i. Another benefit of a functional organization is that it leads to more efficiency and speed of work because a specialist who is the expert in his or her field is likely to do the task much efficiently and effectively than normal people. Another disadvantage of the functional organization is that if some work requires the intervention of two departments then it may be delayed due to lack of coordination between the departments which in turn will lead to the company losing its competitiveness with respect to competitors. Workers are surprised by a number of instructions from different functional Heads. (functional organizational structure). The disadvantages of Functional Organization: The functional organization may have unhealthy competition working with the other areas. Disadvantages of the Functional Organizational Structure Since the employees are grouped by their knowledge and skills, competition may arise between them. Thus, Thereby bringing expertise in performance and reduction in costs.eval(ez_write_tag([[580,400],'googlesir_com-large-mobile-banner-2','ezslot_9',108,'0','0'])); Related: 19 Factors Influencing Entrepreneurship Development. 2. Your email address will not be published. There is a very low level of communication between the two departments, and it results in p… READ MORE on www.slideshare.net The Advantages & Disadvantages of a Mixed Model Approach This can result in mismanagement and discord. Disadvantages are that as the company grows, there may be a lack of integration across the different functions or departments leading to inefficiencies. Disadvantages of Functional Organizational Structure The work can be quite one dimensional. Do you have any solutions to help fix this problem? This structure 3. Thus, The employees in purchase functions are restricted in several ways by the financial manager and quality control manager also. Thanks so much for your work. Because staff mainly reports to the functional manager and therefore,the project manager does not have that much power and influence on the project team. Employees may find it boring to repeat the same task over and over, and become less enthusiastic over time. 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