Examples of companies that use functional structure

A functional structure is the one that divides the major functions of a firm into different groups, for example, information technology (IT) department , finance department , marketing department and production department. Airtel is a leading telecommunication company in India. Airtel has a functional structure which is one of the best organizational structure examples. Every organization needsan efficient organizational structure if it wants to survive and flourish in these competitive times.

Bear in mind that it is the organization that determines the working culture of a place and what is the role and responsibility of an employee in that place. Remember you have a static role to play in these types of structures and report to the functional manager.

In a functional organization structure , the company is divided into smaller departments or groups, and all the employees are grouped in accordance with the function they are performing. Every single department has a head that is directly responsible for the people working under him. For example, the adv. See full list on marketing91.

A functional organizational structure is perfect for medium and small business houses as well as or companies that have either one or a few product lines. All of them report directly to the head. When the company grows, it will start adding further heads and top management officers, but at the beginning, it is a perfect set-up for functional organizational structure.

The important features of functional organization structure are as follows- 1. The functional organization structure determines the weakness and strength of every individualand then places them in specific groups.

It assigns task after evaluating their capabilities and makes sure that every task utilizes their skill to maximum capability. An important feature of a functional organization is that it encourages healthy competition amongst its members. The advantages of the functional organization are as follows- 1. The highly-efficient linear structure helps to give clear instructions to every employee within the department.

The execution of the said instructions also becomes easier. All the individuals or workers are grouped on the basis of their similar know-how and skills. It in optimal performance. The responsibility of every worker and all the departments are fixed those in exact accountability of their work.

The chain of commandis very explicit and clear, and everyone knows which decisions are theirs to make and which to defer to other authorities. It becomes easier to monitor the growth and update the training of the employees. The organization can easily cultivate the skills of several individuals to create an extraor. The disadvantages of the functional organization are as follows- 1. When nearly similar skilled people are working together, conflicts may arise when one employee is promoted whereas others are not. As the company starts growing, the departments also become larger.

Each one of them becomes a small company in itself because of the number of people working in it. The repetitive kind of work can become monotonous and lead to low energy levels. In most cases, the employees of one department have little knowledge about the happenings of other departments, and this causes obstacles if any sort of cooperation is needed by one department from another department. ACROSS THE BUSINESS Most companies have a well-defined strategy that is intended to align the actions of all individuals, teams, and business units to achieve corporate goals.

But when it comes time to execute, they can run into trouble - especially during times of significant business change.

They are grouped based on their specific skills and knowledge. It vertically structures each department with roles from president to finance and sales departments, to customer service, to employees assigned to one product or service. Each functional unit handles one aspect of the product or service pr.

When employees who have similar skills and experiences are grouped together, it makes production more efficient and of a higher quality. Roles and tasks do not change very much so there is little time spent learning, and accountability is clear. Since the hierarchy is simple, employees know the one manager they are to answer to, instead of multiple people. If promotions are not handled well, an employee may be discouraged if a lower performing peer is promoted over them.

Problems may arise among management if department heads are only focused on their department and do not communicate effectively with other departments. If employees and management are. Larger companies are better suited to use the functional organizational structure, especially ones that produce just a few types of goods or services.

Smaller companies may not need the structure or may find it too constraining. The traditional line structure is organized in such a way that a. Project-based structure. Highly dynamic and creative companies – such as software developers, architecturefirms,. What is the organization structure of a company?

A functional structure divides the organization into departments based on their function. What are the different types of organizational structure? Each is headed by a functional manager and employees are grouped as per their role. Functional managers have experience in the roles they supervise. It helps organizations in achieving their business objectives.

These employees are very skilled. The following are a few benefits of the functional organizational structure : 1. Their roles and responsibilities are fixe facilitating easy accountability for the work. The hierarchy is clear. Communication is frictionless within the department. This means the system.

Work is not duplicated as all departments have defined responsibilities. Because of job security, employees tend to be loyal to the organization. Cooperation is excellent within the department. The following are a few disadvantages of the functional organizational structure: 1. Employees have a clear career growth path.

Conflicts may ariseif the performance appraisal system is not properly managed. A highly skilled employee costs more. Communication is weak among the departments. The departments have a self-centered mentality.

The functional structure is rigid and adapting to changes difficult and slow. Decision making is slow due to the bureaucratic hierarchy. Personal bias may affect e. Finding a real-world example of a well-known functional organization is difficult. A small organization dealing with production can be similar to a functional structure.

However, as they grow, they will need elements of a projectized structure. Research-based projects to launch a new product 2. Though, finding an example of a weak matrix structure is easy. Weak matrix structures closely resemble a functional structure.

Those involved with ongoing operations adopt this model. Here, employees feel secure, perform well, and tend to be highly skilled. If they exist, they will have a very limited role and no authority. Are you working in a functional organization?

If yes, please share your experience in the comments section. You will see a few questions on this topic in your exam. Now that you know what functional level strategy is and how it fits into the hierarchy of your business, let’s examine specific examples of goals that work at this level. By way of illustration, let’s imagine that Company X sets three corporate-level goals: efficiency, quality, and delivery.

There’s an executive at the top of the heap, people responsible for each area (the director tier is for bigger businesses), and teams of people who do the work in each department. Everyone just gets on with the allocat. As you can see, this structure is very similar to the traditional line structure, but there are far more lines of communication. In this organizational structure example, we can see that although both directors have people over whom they have direct authority, they can also send information to managers they don’t directly control.

The same is true of the managers’ relationship with teams. The purchasing department may want the financial manager to pay an authorized supplier. To understand this structure, we first need to understand what “staff” means in this context. Staff members are advisors.

They provide technical information, advice, and opinions. They may be able to authorize certain activities, and they might compile reports that help with decision-making. It’s typical of businesses who need experts in knowledge areas like engineering, sciences, law, or insurance. If your business engages in projects that differ from client to client and from project brief to project brief, being able to assemble the right team for the job is helpful. The director appoints a leader for every project and makes people who have the necessary expertise part of the team.

When the project finishes, team leaders and managers are assigned to new projects. You’ll choose this type of organizational structure if your busin. In this instance, the business is also project-base but the team follows a functional structure.

Each team leader is assigned a representative or team from each traditional functional area that would apply to the project and its team. Each organizational structure has its pros and cons. The trick is to find a form of organizational structure in which your business gets the most benefit from the pros and suffers least from the cons. Again, the depend on your business’s needs and activities.

Instead of focusing on specialties, this structure groups individuals based on the products or projects they are undertaking. There are side-issues to consider too. General Electric is an excellent example of how this style can work. The structure served DuPont well, the classic example of a divisional company.

An organizational structure is a system for how activities are directed in for example, is an organization famous for its highly is a functional structure. The picture below shows a kind of functional organizational structure that applies to small businesses. Each department has a head responsible for it. The idea is to get everyone you need to complete the project on a single cohesive team to prevent the overhead and negative politics that can exist when several large departments of an organization are involved.

They may be most effective within large corporations that produce relatively homogeneous goods. Another disadvantage of functional organization structure is that these functional groups may not be able to communicate more often which decreases flexibility and innovation. When a company uses this type of structure , it groups its people according to their knowledge and skills which help them become specialists on that field.

The managers now had to report to both the product division and geographical managers.