Functional Organisational Structure - A-Z of business terminology


with a functional structure the

organization is divided into various

functions or departments each employee

will be assigned to a specific

department and as a result each function

will have its own people resources

budgets and targets functional

structures are known as centralized

structures with a centralized structure

data is passed from the functional level

to top management top management collate

and analyze this data for planning and

control decision purposes they then feed

this information down to middle

management who implement the decisions

the advantages of a centralized

structure are the organization has the

benefit of senior management experienced

specialist staff can be employed and

trained and with specialist teams

systems and procedures are standardized

throughout the organization which helps

to facilitate control there is greater

communication between employees and

managers economies of scale can be

generated and a centralized structure

improves efficiency across the board the

disadvantages of a centralized structure

are specialized functions may lead to a

lack of variety and job enrichment for

employees rigid procedures can limit

employee Flair and ingenuity centralized

structures often lead to greater

bureaucracy and form filling an

equipment purchased and procedures

implemented may be a compromise between

different functional requirements

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