Functional structure

Functional structure

Function structure is one of the structures of a management organization, and refers to an organization that is organized according to work content such as development, sales, production, personnel, and accounting, along with divisional organization and matrix organization. This is the basic organizational structure of.
It is said that the origin of the functional organization is Germany, and it is said that the division of corporate activities into engineering (research, development, production) and business (marketing, sales, etc.) is the beginning of the functional organization.
After that, French business scholar Henri Fayol subdivided it into six functions: technical, sales, finance, accounting, accounting, and management.

Functional structure is an organizational form that is often adopted by general small and medium-sized enterprises, and if each plays a role, the idea is that the entire company can achieve the purpose of the organization.
In addition, it can be said that this is an organizational form that is suitable for a single business with few product types, large scale economies, and strong leadership.


Advantages of Functional structure


In the functional structure, there is no duplication of work or personnel between departments, and it can be said that this is an excellent organizational structure in terms of management efficiency.
Since all products are centrally managed by each function such as sales, research and production, it is also a feature that sales, research and production can be completed in one department each.
If you are an automobile manufacturer, an organization is organized for each function such as development, procurement, production, sales, aftercare, etc., and you can smoothly complete the overall service, so an organization suitable for a manufacturer that makes a single product based on this It can be said as a structure.

Accumulation of know-how

Due to the organizational structure of functional organizations, the development department does not work across sales departments and the sales department does not operate across other departments such as the accounting department.
Therefore, since employees who perform similar tasks gather in the same organization, knowledge and technology are easily shared, and because the same tasks are focused on, it is expected that employees will accumulate know-how, proficiency levels, and productivity. I will.
In addition, we must not forget the merit that we can quickly acquire knowledge and technology because we work in an environment specialized in that specialized field.

Economy of scale

Functional organizations can receive orders and orders collectively for manufacturing, sales, etc. Therefore, the larger the business scale, the smaller the cost per unit of raw materials and labor, which is advantageous for competition. There is a merit that you can do economies of scale efficiently.
Not only the efficiency mentioned above, but also economies of scale, it can be said that it is suitable for companies that make single products such as automobile manufacturers.

Easy to control the organization by the top

Due to the nature of the functional organization, it is a simple organizational structure that concentrates authority on the top of the company, and has the advantage of making it easy to control the organization.
The mechanism of unifying the route of orders from this top to the one below is called the principle of unity of order, which enables smooth communication of information, and on top of that, the top of the company develops, manufactures, sales, etc. You can make a big decision after gathering a wide range of information.

Disdvantages of Functional structure

A general manager with a holistic view cannot grow

The biggest disadvantage of function-based organizations is that the managers of each department become familiar with one function, so they can grow into people with more specialized knowledge, but they have a broad perspective overlooking the whole department. Often not.
Therefore, even if it is suitable for training professionals of each function, it is a disadvantage that it is difficult for general managers and next-generation managers who can make a comprehensive judgment by looking at the overall situation from a broad perspective.


Unclear responsibility

For example, if there is a problem of unknown origin in the final product, there is no control across departments, and it may be necessary to push the responsibility to some department. In addition, when the cause is unknown, it is not possible to immediately identify where the problem is occurring, which may delay the response.
In addition, the evaluation criteria for business performance differ from department to department, which has the disadvantage of making it difficult to evaluate what is being done efficiently.


Vulnerable to change

In a function-based organization, it is more difficult to communicate between divisions than in a divisional organization. For example, the sales department is improving existing products and developing new products based on customer requests and needs that the sales department has noticed. There is a risk of not being notified to the department and losing important opportunities.
Similarly, it is also difficult to communicate with each other, which tends to delay the response to rapid market changes.
Since the perspective of crossing divisions is reserved only for the top management, the burden on the top management, which will be described later, and the fact that the top management can spend precious time on coordination between departments will lead to strategic planning and company direction. The disadvantage is that decisions that make decisions are neglected.
Furthermore, there is a risk that the productivity of work will be reduced by transferring highly specialized employees, and it will be difficult to transfer employees.


Top burden is heavy

The top responsibility becomes especially large when a company that adopts a functional organization makes multiple products and services.
For each product, manufacturing and sales, manufacturing and development, or coordination between sales and development are only tops and strong leadership is needed.
In order to prevent this disadvantage, product-specific committees and product manager systems may be established.
The product manager system is adopted by companies with many items, such as food manufacturers and cosmetics manufacturers, and although there are differences depending on the company, a wide range of authority from product development to product promotion, sales, and distribution can be given. I am an administrator.


Related Terms

The matrix organization is an organizational structure that has the characteristics of both a divisional organization and a function-based organization. A matrix means a matrix in mathematics in which numbers and letters are arranged vertically and horizontally, and as shown in the figure above, it ...
Divisional structure
Divisional structure is one of the basic organizational structures as well as functional organizations and matrix organization ,and this organization is divided into roles according to the products and services provided.(ex. Television Division, Refrigerator Division, etc.) In addition, it is applied not only to each ...
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Functional structure

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