![]() ![]() There are, however, similarities between functional and divisional organizations, as they both rely on grouping employees into different sectors. Whereas the flat organization is devoid of any titles, and employees have a distinguished authority figure they report to in the functional organization. For example, a matrix structure enables employees to report two managers instead of one, as they do in a functional one. This enables creating a stable environment where the business can operate continuously and conquer even larger market shares.Ĭompared to other organizational structures, a functional method has some significant differences. ![]() If there is an issue between the different departments, their leaders will resolve this between each other. It's important to note that in this vertical management structure, employees of each department only communicate with each other and their leaders. This is made possible by dividing the company into its different functional units, which allow for more extensive control over the workflow. The ultimate goal of a functional structure is to put together all the companies’ resources necessary for conducting every single one of its activities flawlessly. The employee responsible for a specific product reports to the leaders of the company's marketing, research, IT and other teams, while these are held accountable by the top management. Ultimately, all of them answer to one clearly defined authority figure. These teams have their own management structures that function independently. When it comes to functional structure, each of them has a specific skill set, and by grouping these experts together, this organizational structure creates a complex yet effective business system. How Does a Functional Organizational Structure Work?Īt the base of every functional organizational structure are the workers employed by the company. Based on a complex hierarchical system, a functional organizational structure establishes a clear line of authority, starting from the individual supervisors, going upwards to higher management, and ending with the CEO. It defines the part each group plays in shaping the future of the entire organization. Functional organizational structure groups the teams inside a company, helping them work together towards a common goal. These methods include vertical structures, like the divisional and the functional organization, and a matrix, which represents the combination of vertical and horizontal approaches.Įvery organizational structure has a different approach to establishing an uninterrupted workflow, which is crucial for a thriving company. Traditional organizational structures work by formalizing employee groups based on strict requirements. Due to their ability to work on virtual, modular and cellular levels, they can react to any issue quickly. The latter are boundary-less and more flexible. ![]() If the organization works effectively, it allows the different departments to excel within their individual capacities and manage tasks on a company level.ĭepending on their goal, organizational structures can be either traditional or non-traditional. The organizational structure of a company refers to the way tasks flow through its entire chain of command. What Is Functional Organizational Structure? In this article, you will be given a comprehensive overview of the functional structure definition, how a functional organizational structure works and its advantages and disadvantages. However, before you delve into applying it to your business, you must understand its basic principles. The type of structure a company adopts can define its success or failure.ĭepending on your type of company, a functional organizational structure can be the perfect tool to achieve this. For a business to reach its maximum performance levels, all its parts have to be aligned in a well-organized structure. ![]()
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