![]() ![]() It also helps them learn from the collective expertise of the department. Every employee who joins a functional organisation pursues a specialisation so that management can allocate them to the respective functional unit. This helps employees achieve business functions and unit goals collectively in teams. For example, the accounting department comprises all employees who specialise in business finance and have accounting skills. In functional organisations, every functional unit consists of employees with similar skill sets and expertise in a particular business function. Related: What Is Organisational Culture? Every employee pursues a specialisation For example, the marketing manager is responsible for communicating with the heads of the finance department and the sales department and vice versa. This helps ensure that all departments work together towards the company's larger objectives. ![]() While each department acts as an independent, functional unit, the department heads coordinate to communicate with each other. The manager, in turn, reports to their superior, usually someone who is part of the company's senior management. The associates and executives of each department report to their department head or manager. In a vertical hierarchy, every employee reports to a management figure senior to them. ![]() Related: The Importance Of Delegation Of Authority In Management Each department follows a vertical hierarchyĮvery department in an organisation that uses a functional structure follows a vertical hierarchy. ![]() While the functional departments execute the day-to-day operations within the organisation, the senior management focuses on strategy and planning. The senior management is sometimes known as the top management because it is the topmost in the company hierarchy. Managers and department heads report to the higher-ranked senior management. This senior management may consist of the founders, C-suite level employees or the board of directors. The characteristics of functional organisational structures are as follows: There is a senior management teamīusinesses that follow this type of organisational structure usually have a senior management team. Related: What Is An Organisation? (Characteristics And Structures) What Are The Characteristics Of A Functional Organisational Structure? Each of these departments works independently and follows a vertical hierarchy within them. For example, a sales executive may report to a sales manager, while the sales manager may report to the company's vice president. Functional organisations follow a vertical hierarchy, where each employee reports to someone senior. Each department is responsible for a specific business function and reports to its respective functional managers or department heads.Īll the business's functional units work towards the organisation's common objective. For example, senior management may break down a larger business into marketing, finance, legal and operations departments. These departments consist of employees with the same specialist backgrounds as one another. What Is A Functional Structure In Organisations?Ī functional structure is an organisational structure where senior management divides a larger company into smaller homogenous groups or departments. In this article, we discuss the meaning of functional structure in organisations, describe its characteristics and explain the advantages and disadvantages of this setup. Knowing more about these structures can help you understand how they contribute to the productivity and efficiency of the teams in a company. Organisations can choose from hierarchical, functional and divisional organisational structures, among others. Most businesses follow an organisational structure that helps improve their efficiency and creates an environment conducive to growth. ![]()
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