Page 5 - Lesson Note 2

• As the focus is mostly on a specific and limited range of skills, training of

employees becomes easier.
• This also leads to an increase in managerial efficient which in turn

increases profit margins.
• Lastly, it ensures that all the diverse tasks get a fair amount of

attention.

Disadvantages

•A major drawback of the functional structure lies in its definition itself.
As stated already, it puts emphasis on division based on functions of an

enterprise. Now as it stresses on the diverse functions, it generally leads

to an increased concern on interests of departmental interests rather

than the interests of the organization as a whole. Technically, this can

lead to the emergence of functional empires and even dwindling levels of

concern for organizational objectives.
• Again, as the departments are completely different in operations from

each other, there is a big barrier to communication between them.

• There may be conflict of interests among these departments which are

profusely looking to fulfill the individual departmental interests. Such

conflicts can hinder the growth of an enterprise. Further, such conflicts

can further arise in the absence of clear separation of responsibility.
• When individuals always deal with specific tasks their perception

narrows down and they don’t appreciate the varying point of views.

Consequently, they remain fixated on specific ideas and fail to develop as

individuals. All in all, this leads to inflexibility.

In the light of above-mentioned facts, we can observe that functional
structure is suitable for an enterprise which is large, has a large number

of activities to perform and looks for a high degree of specialization.