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Essay On Organizational Structure

Organizational structure can be defined as the method that an organization distributes employees and jobs so that its work can be performed and its goals can be achieved. There are different types of organizational structures like functional structure, divisional structure and matrix structure. The functional structure is the most common structure which has been widely used in organizations. According to Talha (2005), functional structure involves grouping together people who perform similar tasks or use similar technology or materials in the same department. This essay will introduce the following five parts: history of functional structure, the functional structure model, strengths of functional structure, weaknesses of functional structure, and the application of functional structure.

History of functional structure. Functional structure has appeared in the 20th century. While with the emergence of the industrial age, efficiency became the most significant point to management. Functional structure is pyramidal structured, as Brews (2004) believes it was structured with few managers at the top and most people at the bottom, organized by the tasks they performed. Job scopes were clearly distinguished and authority was from top to bottom. The organization set rules and regulations to control their working process.

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Functional structure model. (Source: Anumb et al. (2002), Organisational structures to support concurrent engineering in construction, published by MCB UP Ltd.) As the above chart shows functional structure usually has one or several managing directors at the top. They are in charge of the directors who have been divided by their different type of works, such as research & development director, marketing director, manufacturing director, finance director and human resources director. After that, the whole department will also be segmented into some specific parts.

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For instance, the marketing department can be classified into three parts and they all have managers who are independent and lateral to each other. All blocks focus on their own points in this model. The financial department concentrates on financial activities. The human resources department is in charge of the hiring, training, and firing operations. The R&D function creates new products or ideas. Manufacturing focuses on producing the finished product. The sales team takes the role of promoting the finished product in the market.

Strengths of functional structure. As the most widely used organizational structure, the functional structure has four obvious advantages over the other structures. According to Morton (2011), the main strengths of the functional structure are clear responsibility, departmental coordination, knowledge sharing and ease of supervision.

  • Clear responsibility: the construction along the functions will provide a clear working division between different departments. Since the employees all have different places they can play different roles in an organization. As a result, it is easy to find out what they should do or what they should not do. The organization will operate more efficiently and the targets can be managed easily and achieved effectually.
  • Departmental coordination: functional structure can bring responsible objective to the organization and make different departments can get better cohesion. It can create a win-win situation in the teamwork of the organization and it can reduce the contradictions of different departments.
  • Knowledge sharing: the employees who are working together are in the same field in this structure. So that they can share the knowledge which is different from their own with other employees. For example, an accountant can exchange knowledge with other accountant and support each other. It is the simplest way too familiar the product line and therefore is best suited for cultivating general managers in an organization.
  • Easy to supervise: in functional structures, the directors are usually the specialists in their field and they usually have a really high performance. These leaders should have a superior technical level of management and a broad range of working experiences which can make the whole management process easier. As a result, employees can be better motivated, distributed, rewarded and punished.
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Weaknesses of functional structure. Although this kind of organizational structure has a lot of benefits it still needs some improvement. Kushnuma (2007) summarized the weaknesses of functional structure like the following five points: duplication of resources, inhibits career growth of specialists, divisional affiliations, difficult product integration and slow response.

  • Duplication of resources: in order to separate the various departments and make them can work independent. Some of the resources which should be shared may have been reduplicated. Such as the technical experts in specific fields could not be shared across the separate departments.
  • Inhibits career growth of specialists: although the managers could be well-trained in fundamental structure, the technical experts could feel bad in this context. For instance, when technical personnel from the technology department work with another department, they may feel alienated from peers. In addition, they have poor exposure development to the developments across the organizations.
  • Divisional affiliations: employees can clearly feel the perception of affiliation in their own department but they lack the awareness of the whole organization. They may know their purpose yet may not understand how they can achieve the organization’s targets.
  • Difficult product integration: The organization which has various production lines that could use different parts to make larger products may have a very difficult integration task. The challenge is caused by lacking coordinated divisions. Every department manager will pay more attention to his product and ignore the problem of integration because it is not his job.
  • Slow response: functional structure can not adapt to a new environment rapidly when the changes coming. The authorities of decision-making are totally controlled by top managers. As a result, it needs more time to communicate, authorize and finally improve the organization from the changes.
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Application of functional structure. The functional structure can become the most efficient structure when the organization has fulfilled the following two conditions. Firstly, it should be a small or medium-size organization that provides few kinds of productions. The large-scale organizations which have various products would have really complex daily operations if they use this structure. Secondly, the external environment of the company must remain stable because the functional structure is difficult to change in a short time.

Conclusion. In conclusion, the functional structure has its own strengths and weaknesses. The managers should consider the actual circumstance of their own organization to decide whether or not they will use this kind of structure, such as the type of organization, the size of the organization and the external environment of an organization. An appropriate organizational structure can help the organization working in a good condition, operating efficiently and developing rapidly.


  • BREWS, Peter and CHRISTOPHER, Tucci. (2004) Exploring the Structural Effects of Internetworking. Strategic Management Journal, 25(5), 429-452.
  • ANUMB, Catherine and MALIK, Khalfan. (2002) Organisational structures to support concurrent engineering in construction. Industrial Management & Data Systems, 102(5), 260-270.
  • KUSHNUMA, Irani (2007). Type of Organizational structures. [online]. Last accessed 21 August 2011 at
  • MORTON, Donna (2011). The Functional Structure of an Organization. [online]. Last accessed 24 August 2011 at
  • TALHA, Siddiqui (2005). Organizational structure. Massachusetts, Massachusetts Institute of Technology.

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