Organising — Business Studies STD 12 Commerce — Question

Functional structure is an organisational structure formed by grouping of jobs of similar nature under various functional departments.
Grouping of jobs of similar nature under functional and organizing these major functions as separate departments creates a functionalstructure. All departments report to a coordinating head.
Advantages: The functional structure has many advantages to offer. Important among them are as follows:

1. A functional structure leads to occupational specialisation since emphasis is placed on specific functions. This promotes efficiency in utilisation of manpower as employees perform similar tasks within a department and are able to improve performance.
2. It promotes control and coordination within a department because of similarity in the tasks being performed.

Disadvantages: The functional structure has certain disadvantages which an organisation must take into consideration before it adopts it. Some of them are as follows:

1. A functional structure places less emphasis on overall enterprise objectives than the objectives pursued by a functional head. Such practices may lead to functional empires wherein the importance of a particular function may be overemphasised. Pursuing departmental interests at the cost of organizational interests can also hinder the interaction between two or more departments.
2. It may lead to problems in coordination as information has tobe exchanged across functionally differentiated departments.