Question

Six Mark Question:
What is meant by 'functional structure' of organisation? Explain any two advantages and two limitations of this structure.

Answer 1

Functional organization has been divided to put the specialists in the top position throughout the enterprise. This is an organization in which we can define as a system in which functional department are created to deal with the problems of business at various levels. Functional authority remains confined to functional guidance to different departments.

Merits of Functional Organization

• Specialization- Better division of labour takes place which results in specialization of function and it’s consequent benefit.
  
• Effective Control- Management control is simplified as the mental functions are separated from manual functions. Checks and balances keep the authority within certain limits. Specialists may be asked to judge the performance of various sections.
  

Demerits of Functional Organization

• Confusion- The functional system is quite complicated to put into operation, especially when it is carried out at low levels. Therefore, co-ordination becomes difficult.
  
• Lack of Co-ordination- Disciplinary control becomes weak as a worker is commanded not by one person but a large number of people. Thus, there is no unity of command.