Functional Organisational Structures

• Functional organizational structures

  Employees are organized based on their roles and functions into departments or functional areas such as marketing, operations, HRM (human resources), and finance
• Objectives of functional areas

  • Marketing: Improve market growth
  • Operations: Increase quality
  • HR: Become more diverse
  • Finance: Ensure positive or strong cash flow
• Functional organizational structures

  • Streamline efficiency and expertise within each functional area
• Teams within functional areas

  • Marketing: Market research, advertising, digital marketing
  • Operations: Supply Chain management, procurement, logistics, quality control
  • HR: Recruitment, selection, training, talent development, employee relations
  • Finance: Financial reporting, financial analysis, budgets and control, financial control
• Advantages of functional organizational structures

  • Specialization with individuals and teams having specialist skills for their functional area, development of skills over time, appropriate for centralized decision-making structure, easier to supervise
• Industries where functional organizational structures are used

  • Manufacturing, finance, healthcare
• Issues with functional organizational structures
• Issues with functional organizational structures

  Silos might occur between functional areas, lack of communication, collaboration, flexibility, and adaptability to change, especially in fast-changing environments