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advantages and disadvantages of functional and divisional structure

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. Divisional structures developed from the traditional functional structure, which features departments built on related work tasks, such as marketing. Essay topic: Advantages and disadvantages of functional structure. When organisation grows into unrelated products and services for different markets then it is difficult to manage. Organizations may choose from a number of common operating structures. Disadvantages of the Functional Organizational Structure. This can create some conflict. In your answer, pay special attention to advantages and disadvantages of each structure and discuss them systematically. Lack of teamwork and reduced flexibility may cause conflicts between departments and units. Cooperation and communication between departments and units may be poor. Advantages of a Divisional Structure. 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. Companies need to employ more managers and employees when using this type of organizational structure. 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. It will lead to poor communication and coordination across functional units. Matrix Structure - Superior to Divisional and Functional Structures. This will reduce communication channels. A divisional structure is a common organizational form used in business. So how do you know which of these three structure types, functional, divisional and matrix is best for your organization? 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. Disadvantages of the Functional Structure The functional structure also has inherent disadvantages. 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 the organization grows bigger, functional areas become difficult to manage. In this lesson, you'll learn about divisional structures, including their advantages and disadvantages. A divisional organizational structure breaks the company down into units that are self-contained and generally independent from one another. 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. Both functional and project manager roles can be outlined in the matrix organizational structure. The narrowness can lead to barriers in communication, cooperation and coordination. 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. 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 . The functional structure describes an organizational structure in which the division of work is paramount. The advantage of the product division structure is that a division would get full expertise in handling a specific product. Divisional Structure: Functional structure is helpful up to a certain limit of expansion and growth. The divisional structure is organised around products, projects, or markets. Expansion and growth. 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 … In this article, we are going to review the advantages and disadvantages of each organizational structure: Functional, Projectized, and Matrix. ADVANTAGE OF DIVISIONAL STRUCTURE Product specialisation. Functional organization structure is optimal for small businesses or companies producing standardized goods or services. Consequently, labour expenses can be higher. Staff working skills can be … Large organization may break down into Rail, water, road and building division. Functional managers oversee entire departments of an organization. Employees are possible to become experts. And that's true here. These days, most large manufacturing organizations have a functional structure. Advantages of a Divisional Structure. Features of Secondary Market. Each structure has its distinctive advantages and disadvantages which will run through now. As with all organizational structure types, the divisional structure offers distinct advantages and disadvantages. 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. 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. The divisional structure is a type of organizational structure that groups each organizational function into a division. Advantages & Disadvantages of Divisional Organizational Structure. The following are the main disadvantages of divisional organisation structure: (1) Conflicts between Divisional Heads: Every divisional head wants to establish his supremacy. Generally speaking, divisions work best for companies with wide variance in product offerings or regions of geographic operation. Functional Organization Structure Main Advantages: Offers a high level of specialization. Advantages and disadvantages of a product division structure . Flexibility. "If the body be feeble, the mind will not be strong" (Thomas Jefferson, 1786). As with all organizational structure types, the divisional structure offers distinct advantages and disadvantages. Because functions are separate from one another, employees may have little understanding of and concern for the specialty areas outside their own functional area. A disadvantage is that employees are responsible to their project team as well as to their functional areas. In this kind of structure, different divisions are made to handle different products. It helps in the development of varied skills in a divisional head. Outlined in a grid fashion, the functional managers and project managers are role-specific and are included within the matrix. 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. 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 … Jobs and activities are … Disadvantages of the Functional Organizational Structure Since the employees are grouped by their knowledge and skills, competition may arise between them. A Functional organizational structure has several advantages and disadvantages when it comes to managing projects: Advantages. Multi-divisional structures can be costly. Every company needs an organizational structure, it basically defines the hierarchy of the company. Often, organizations will divide the company into various product departments; however, since my company was in … The functional structure is one type of organizational structure that helps companies manage employees and meet their business goals. One advantage of the matrix organizational structure is that people across different functional areas have a better understanding of their coworkers in other areas. This situation leads to conflicts among the various divisional heads. 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 . Additionally, companies use more financial resources for distribution, printing and other expenditures when employing a multi-divisional structure. Well, the best answer in any MBA is class of course it depends. A matrix structure is superior to a functional and a divisional structure.Please, comment on this statement. To satisfy ego each demands maximum resources for his division. 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! Benefits & Disadvantages of a Functional Organizational Structure. Without this structure, there would be chaos and inefficiency. Functional Vs. Divisional Organizational Structure. In simple words, it defines who works for whom and who reports to who. Functional structures typically work well for smaller and less complex organizations dealing with only one or a few products or services. Each employee will report to his direct functional manager. Divisional structure: Divide the organization according to the type of work, region, product and so on. 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