In a company, of course, has an organizational structure as the basis of its management. The functional organizational structure, one that is widely used.
Actually there are still other organizational structures. Call it the divisional organizational structure, matrix organizational structure, committees and work teams.
Then why is the functional structure most often used by companies? That’s because, good organizational management must be able to adapt the organizational structure to the company’s operations.
For companies that produce only a few types of products or services, this organizational structure is most appropriate.
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To be able to understand more clearly about the functional organizational structure , we look at the meaning and advantages.
Definition of Functional Organizational Structure
In an organization or company, it is necessary to have coordination between sections or divisions to expedite operations. So institutions like Non-Governmental Organizations also need coordination like a company.
This will be more effective when the function of each division is clarified. Therefore it is necessary to have a clear organizational structure in it.
The type of organizational structure commonly used by companies is the functional structure. What’s that?
Functional organizational structure is a type of organizational structure commonly used by companies by grouping employees based on their expertise.
So, each section is filled with people who have the same skills and tasks. They will be divided into several work units.
With this organizational structure, coupled with the right business strategy and implementation, it can help reduce the business operating budget.
This type of organizational structure is also recommended for companies whose business strategies tend to be fixed and stable. Because in that environment, the effectiveness of this organizational structure is far more visible.
However, even though it is often used, there are still advantages and disadvantages to a functional organizational structure. Here is a brief explanation.
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Disadvantages and Strengths of Functional Organizational Structures
Before determining the type of organizational structure that you will implement in your company, you should first understand what the advantages and disadvantages are.
That way, you can consider the potential benefits it can provide. The advantages of a functional organizational structure include:
- Motivate employees to give their best performance, because they are grouped according to their expertise
- Providing a sense of comfort and security for employees, because they do work that is mastered with people who are also competent in this field
- A clear hierarchy so as to avoid double commands or jobs that overlap one another
- Employee career paths are clearer
- Providing stability to business operations as well as the responsibilities of its employees. This further increases employee loyalty thereby minimizing the turn over rate.
After discussing some of the advantages, now we turn to the disadvantages. This can be a consideration before you decide to implement this organizational structure within the company.
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The disadvantages of a functional organizational structure are:
- The risk of employees feeling bored with repetitive activities and types of work
- Minimal interaction with employees from other divisions
- The development of skills and insights is slow, due to the focus on the division only
- Decision making must go through a long bureaucracy
- To get a specialist role, you have to issue a special budget
- Form a company that is difficult to accept change
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Benefits of Functional Organizational Structure
This type of organizational structure can provide many benefits to an organization or company. Not only on a large scale, but also on a small scale.
Some of the benefits that you can get from this type of organizational structure when applying it properly are:
1. Specialization
By implementing this organizational structure, a company is divided into several departments based on their main function or task.
Where each department is supervised by a manager who is certainly competent in that field. As a result, performance is faster as well as efficient because it is controlled by employees.
2. Coordination is more awake
There is grouping in each department or division, forming a specialization. That way coordination within the division or team is easier.
Understanding and mastery of the same field in one division, allows for an increase in coordination.
The effect is that work performance also increases and work can be completed according to the company’s target in a faster time.
3. Increased Managerial Efficiency
This type of organizational structure also helps increase managerial efficiency.
This is because the type of work done is the same and repeated. Thus allowing for an increase in profits from your company.
You can learn about improving managerial efficiency through project management courses from Mekari University.
Through the course, you can apply human resource development management according to company projects.
4. Minimizing Duplication of Functions and Tasks
In a functional structure, there will be very rare duplication of functions and tasks. The reason is because each task has been divided according to their respective divisions.
That way, human resources are used effectively according to their abilities. One division does not need to interfere in carrying out the duties of other divisions.
5. Operations are faster and clearer
In general, experienced senior managers will be able to provide quick solutions to any problems.
Similarly, when leading a division, he will be able to quickly decide to whom a task is delegated.
Of course this will speed up operations because a job can be completed immediately.
Not only that, the functional structure adheres to the grouping of human resources based on expertise, clarifying the function of each section.
This then makes the allocation of responsibilities clearer and more focused. This means that operations run more smoothly and effectively to achieve goals.
6. There are training facilities
The functional organizational structure aims to group employees according to their duties and expertise.
This then makes the company want, every part of the division can focus on that field and have capabilities that continue to improve.
One way is by providing free training facilities for employees. This is also a provision for employees, if one day there is a change in regulations related to employment.
This type of organizational structure can be identified through a chart which usually contains the positions of vice president, administrative, accounting, sales department, engineer as well as customer service.
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Although there are also those who use different structural arrangements, the point is that there are groupings according to their skills.
Because the tasks and roles of each division are specific, there is almost no reason for an employee to receive several different types of assignments.
They can focus on their work and get it done as well and as quickly as possible. If there is interaction between divisions, it is certain that there are interests that require passing through these other divisions.
Call it like the need for a promotional budget by the marketing division, automatically having to contact the accounting division that holds the authority of the company’s budget.
This is also a weakness and a solution is needed for this type of structure. Where a division focuses on its responsibilities without regard to the difficulties of other divisions which result in a buildup of work.
After obtaining some of the explanations above, do you understand enough about the functional organizational structure?
If so, then it’s time to consider whether this type of structure is suitable for implementation in your business.
Because by choosing the right organizational structure, you can maximize the benefits that can be obtained.
In addition to adjusting to the type of business, also adjust it to the business strategy that you use in achieving business goals. That way the structure can maximize its effectiveness.