Functional structure chron

Under this structure, the organization groups employees according to a specialized or similar set of roles or tasks. Not designed to change quickly, functional structure works well in a stable. This requires you as a business owner to develop standard methods of operation.

What is functional organizational structure? Why is functional structure important?

How does functional structure affect bureaucracy? Ryan Underdown, Associate. READ MORE on smallbusiness.

Common functions include operations, accounting, marketing, information technology and human resources. A level of top managers typically oversees the work carried out in each functional area. According to an article for the Houston Chronicle, the primary benefit of a functional structure is that each significant work activity is organized.

Any business employing more than a few people needs to organize itself into a structure that defines how information travels within the company, and how workers in different roles and at different levels of responsibility relate to each other. Organizational structures increase efficiency by ensuring that all employees know to whom they report and from whom they take direction regarding their work activities.

The two most common types of organizational structure are known as functional and divisional. A functional organizational structure organizes the chain of authority by occupational function. These broad areas may be further subdivide as when administration is divided into human resources and accounting units.

Employees within each functional unit may have similar titles, backgrounds and job descriptions, although they may assume different levels of responsibility and supervision within their units. See full list on yourbusiness. Divisional organizational structures divide the corporation into units based on factors such as geography or product line. A national retail chain might have a division for each state or region where it has sales outlets.

Each division behaves like its own company, with its own top-level management and its own subdivided units. The lines of authority seen in functional structures provide for clear channels of communication and clear expectations about who reports to whom. This increases efficiency by eliminating guesswork and duplication of effort. Within each functional unit, employees of related specialties work together, providing for ease of information sharing.

The hierarchical structure makes it easy to identify promotional paths for employees, providing an additional motivating factor for the workers. The major disadvantages of functional structures are the built-in barriers to interdepartmental communications and the tendency for specialists within a unit to develop tunnel vision, which can stifle innovation. A company with this structure is efficient as long as it stays within its founding purpose, but it may respond ineffectively if outer circumstances change or the organization seeks new areas of operation. In a divisional organization, personnel from multiple specialties work together on projects.

This stimulates innovation and reduces problems involved with interdepartmental communication.

Because the major divisions operate on the same level with each other, the projects have a better chance of getting the resources and funding they need. Also, if the divisions are very large, they might tend to organize themselves functionally, thus experiencing the same disadvantages that are typical of functional structures. 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 operations are grouped based on divisions or separate product categories.

An organization can be arranged according to a variety of structures, which enable the organ. Each function is managed by a departmental head that has a dual responsibility to be accountable to the top management and to direct the respective department to achieve favorable performance. Such functional areas are also referred to as ‘silos’.

Divisional structure is a type of organizational structure where operations are grouped based on divisions or separate product categories. Here, separate functions such as Production, HR, and finance can be seen under each division to support each product line. Divisional structures are also named as ‘M-form’ (Multidivisional form) and are most suitable for companies who operate with several product categories in geographically dispersed markets.

Multinational organizations such as Unilever, N. The difference between functional organization and divisional organizations mainly depends on the way they are structured. If the tasks are segregated according to separate divisions or product categories, such organizations are divisional organizations. The organization structure should be carefully chosen and this will depend on the nature of the business and the preference of the top man. In this type of organization, for example, there may be a marketing department, a sales. As sales increase, organizations generally adopt a functional structure.

This structure groups employees into functional areas based on their expertise. These functional areas often correspond to stages in the value chain such as operations, research and development, and marketing and sales. Functional Structure. In a functional organizational structure , you would find the.

In simple terms, it can be likened to that of a more traditional company where staff is presided. Each functional unit handles one aspect of the product or service provided: information technology, marketing, development, research, etc. Top management is responsible for coordinating the efforts of each unit and putting them together into an organized whole. For example, the project manager could be responsible for handling.

Cross- functional teams consist of employees from various functional departments who are responsible to meet as a team and resolve mutual problems. Team members report to their functional departments, but they also report to the team leader of the cross- functional team to which they belong. A functional structure divides the organization into departments based on their function. Each is headed by a functional manager and employees are grouped as per their role.

This ensures that employees are using their skills effectively.