Divisional Structure: Functional structure is helpful up to a certain limit of expansion and growth. It will lead to poor communication and coordination across functional units. Employees do not report to multiple managers. In the functional structure, such as shown in the following Facebook organizational chart, functions are separated into different groups, resulting in some defects.Here are the major disadvantages you must consider: Create Your Own Org Charts! It helps in the development of varied skills in a divisional head. Lack of teamwork and reduced flexibility may cause conflicts between departments and units. Organizations may choose from a number of common operating structures. The divisional structure is organised around products, projects, or markets. The following are the main disadvantages of divisional organisation structure: (1) Conflicts between Divisional Heads: Every divisional head wants to establish his supremacy. "If the body be feeble, the mind will not be strong" (Thomas Jefferson, 1786). Company Organizational Structure: Functional vs. Divisional vs. Matrix vs. Flat Organizational structures define the hierarchy or an organization, and determine the way information flows within it . When organisation grows into unrelated products and services for different markets then it is difficult to manage. This can create some conflict. Advantages and disadvantages of a product division structure . By pulling resources from these departments to devote to a specific product, location or customer, the divisional organizational structure gains some advantages the functional structure lacks. These days, most large manufacturing organizations have a functional structure. One person, alone, can start and run a small business, but when two or more people come together to accomplish a business goal, an organization is formed. The following are some disadvantages of the functional organization structure: Employees may get bored because they do the same repetitive type of work all the time. Disadvantages of the Functional Organizational Structure. Both functional and project manager roles can be outlined in the matrix organizational structure. Expansion and growth. Functional Organizational Structure. Because functions are separate from one another, employees may have little understanding of and concern for the specialty areas outside their own functional area. Advertisements: Related Articles: 6 Important Advantages of Functional Organisation 4 Main Types of Organisation Structure (With Diagram) Advantages and Disadvantages of Decentralisation Types of Organisational Designs: Functional, Place, Product and Multidivisional Design Organisational Designs Types: Matrix, Network, Virtual and Learning Organisations Advantages and Disadvantages … Large organization may break down into Rail, water, road and building division. In this article, we are going to review the advantages and disadvantages of each organizational structure: Functional, Projectized, and Matrix. Functional Organizational Structure In a functional organization structure, the project manager and all the resources work in the same company division, such as the sales and marketing department. In simple words, it defines who works for whom and who reports to who. Cooperation and communication between departments and units may be poor. A Functional organizational structure has several advantages and disadvantages when it comes to managing projects: Advantages. Functional structures typically work well for smaller and less complex organizations dealing with only one or a few products or services. Advantages & Disadvantages of Divisional Organizational Structure. As with all organizational structure types, the divisional structure offers distinct advantages and disadvantages. Functional organization structure is optimal for small businesses or companies producing standardized goods or services. The functional structure describes an organizational structure in which the division of work is paramount. Matrix Structure - Superior to Divisional and Functional Structures. Divisional Structure. Multi-divisional structures can be costly. Functional Vs. Divisional Organizational Structure. A disadvantage is that employees are responsible to their project team as well as to their functional areas. Fast Decisional Making. Well, the best answer in any MBA is class of course it depends. Disadvantages of the Functional Structure The functional structure also has inherent disadvantages. The advantage of the product division structure is that a division would get full expertise in handling a specific product. The divisional structure is a type of organizational structure that groups each organizational function into a division. So how do you know which of these three structure types, functional, divisional and matrix is best for your organization? In this lesson, you'll learn about divisional structures, including their advantages and disadvantages. Additionally, companies use more financial resources for distribution, printing and other expenditures when employing a multi-divisional structure. In this article, we discuss the advantages and disadvantages of the functional structure, plus learn about other organizational structures in business. Advantages and Disadvantages of Functional Organization ... functional organization has both advantages as well disadvantages and any company thinking of adopting this type of structure should carefully analyze both the aspects and then take the decision. It is a type of organizational structure that groups each organizational function into a division. A divisional organizational structure breaks the company down into units that are self-contained and generally independent from one another. Without this structure, there would be chaos and inefficiency. Since the employees are grouped by their knowledge and skills, competition may arise between them. Often, organizations will divide the company into various product departments; however, since my company was in … Functional managers oversee entire departments of an organization. Outlined in a grid fashion, the functional managers and project managers are role-specific and are included within the matrix. This situation leads to conflicts among the various divisional heads. Advantages of a Divisional Structure. The following are the advantages of divisional organisation structure: (1) Development of Divisional Heads: The head of each division looks after all the functions connected with their product that is, purchase, sale, advertisement, production, finance, etc. Disadvantages Functional structure has some disadvantages as well, including: People specialized in certain functions may find difficulties in understanding other functions and hence they are reluctant to change. ADVANTAGE OF DIVISIONAL STRUCTURE Product specialisation. Divisional structures developed from the traditional functional structure, which features departments built on related work tasks, such as marketing. Disadvantages of the Functional Organizational Structure Since the employees are grouped by their knowledge and skills, competition may arise between them. To satisfy ego each demands maximum resources for his division. As with all organizational structure types, the divisional structure offers distinct advantages and disadvantages. The narrowness can lead to barriers in communication, cooperation and coordination. The functional structure is one type of organizational structure that helps companies manage employees and meet their business goals. Each structure has its distinctive advantages and disadvantages which will run through now. When establishing a structure, business leaders should decide how a structure best aligns with the company’s principles and goals and how it outlines and sets up tasks for each employee. If you want to learn more about organizational structure types in Project Management you should check out our 100% Online and Self-Paced Project Management Professional Certification Training . This will reduce communication channels. Let's take a look at the advantages and disadvantages of each so you know what you're up against when you join a new structure. Advantages & disadvantages of divisional organizational structure Chris Joseph - Updated February 06, 2018 Large companies that serve a varied customer base or operate in a number of geographic regions may choose to operate with a divisional structure. Generally speaking, divisions work best for companies with wide variance in product offerings or regions of geographic operation. Jobs and activities are … This business structure is typically found in companies that operate worldwide—for example, Virgin Group is the parent company of Virgin Mobile and Virgin Records. Flexibility. Essay topic: Advantages and disadvantages of functional structure. Consequently, labour expenses can be higher. Employees are possible to become experts. Benefits & Disadvantages of a Functional Organizational Structure. Advantages of a Divisional Structure. Each employee will report to his direct functional manager. In this kind of structure, different divisions are made to handle different products. Features of Secondary Market. Key Difference – Functional vs Divisional Structure The key difference between functional and divisional structure is that functional structure is an organizational structure in which the organization is divided into smaller groups based on specialized functional areas such as production, marketing and sales whereas divisional structure is a type of organizational structure where … In your answer, pay special attention to advantages and disadvantages of each structure and discuss them systematically. One advantage of the matrix organizational structure is that people across different functional areas have a better understanding of their coworkers in other areas. Functional Organization Structure Main Advantages: Offers a high level of specialization. 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