Which of the following is an advantage of a functional project management organization?

Functional structure is one of the most common types of organisational structure in business, especially in larger companies, where groups of employees are organised according to the function they perform.

What is a functional organisational structure?

In this type of organisational structure, businesses are organised according to their roles and skills into smaller groups or departments. This may include, for example:

• sales
• marketing
• production
• IT
• finance
• operations

Individuals, teams and line managers are grouped into a specialised department where they report to the head of the department, eg the sales director. The business' top management team typically consists of several functional heads, eg the chief financial officer, the marketing director or the head of operations.

Read more about the hierarchical organisational structure.

Advantages of a functional structure

Functional structure arguably achieves greater operational efficiencies, as employees with shared skills and knowledge work together and perform similar functions.

The advantages of this type of structure are:

• specialisation - departments focus on one area of work
• productivity - specialism means that staff are skilled in the tasks they do
• accountability - there are clear lines of management
• clarity - employees understand their own and others' roles

However, the nature of departmentalism within a functional structure can present certain risks.

Disadvantages of a functional structure

The vertical separation of divisions and teams can lead to the creation of 'organisational silos' - a mindset where one team hesitates to share information or knowledge with other teams within the same organisation.

This silo mentality can cause problems around:

• aligning priorities across the business
• the flow of information and communication
• collaboration
• co-ordination of decision-making
• embedding and managing change across departments

Functional structures are common in a wide range of businesses across many sectors. They work best within large companies, especially those that produce products or services continuously, such as in manufacturing.

Smaller companies may find functional structures too rigid, preventing them to adapt to changes quickly and easily. Project management organisational structure or flat organisational structure may be better options in this case.

Depending on your business needs, a matrix organisational structure or decentralised organisational structure may also be a suitable choice.

• Functional organizational structure advantages and disadvantages
  • Advantages of Functional Structure organizations
  • Disadvantages of the Functional Organizational Structure
  • Summary
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Functional organizational structure advantages and disadvantages which can be can be defined as “An organizational structure in which workers are distributed across departments according to areas of specialization as indicated on the organizational chart. Under functional Organizational Structure, the project manager has limitation in the amount of authority to assign work and share resources.” A functional structure divides the organization into departments based on their functions.

Each is headed by a functional manager and employees are grouped according to their roles. Functional managers typically have experience in the roles they supervise. This ensures that employees are using their skills effectively. A functional structure that maximizes department expertise helps companies achieve their business objectives.

Read: Advantages and disadvantages of bureaucracy

Employees are often organized according to their function in an organizational chart. This functional organization chart shows the role hierarchy i.e. president, vice president, finance, sales, customer service, administration, etc. Functional organizational structure advantages and disadvantages outline that each department has a head responsible for it, helping the organization control the consistency and quality of its performance.

Sometimes referred to as “silos” Functional departments operate on a vertical hierarchy which means each department is vertical and disconnected from the others, and communication flows straight up through the department heads to top management.
The functional organization structure is ideal in businesses dealing with operations or projects, for example, organizations who are in manufacturing industries show Functional organizational structure advantages and disadvantages.

Efficiency and specialization are two strengths of functional organizational structures. For small companies, it is recommended to only those with a limited number of products and services. In Functional organizations, the employees are mostly highly-skilled due to executing the same work over and over, which means they feature high efficiency and superior performance.

Since employees are grouped in relation to their skills and experience, they gain more knowledge and expertise and become specialists, making them highly efficient and productive. Highly efficient and productive means that they will perform quickly, with less chance of error, and their output will be of high quality.

Advantages of Functional Structure organizations

When employees who have similar skills and experiences are grouped together, it makes production more efficient and of a higher quality. Roles and tasks do not change very much so there is little time spent learning, and accountability is clear. Since the hierarchy is simple, the following are several benefits or advantages and disadvantages of functional and divisional structure:

1. Efficiency and productivity
   Employees are grouped by their knowledge and skills, allowing them to achieve high performance. Their roles and responsibilities are fixed. This facilitates easy accountability for the work.
2. Clear hierarchy
   The hierarchy is clear and transparent. This reduces the number of communication channels.
3. Cooperation
   Cooperation is excellent within the department. Employees know the one manager they are to answer to, instead of multiple people.
4. Loyalty
   This streamlines communication and reduces confusion among employees. Employees can feel confident about what they’re doing because it is standardized. They are more likely to feel loyalty to their department and the organization as a whole.
5. Morale
   This increases morale and work ethic, as there is more job security. There is a clear path of growth for employees which provides motivation, and they are more likely to be corporative with people in their department.
6. Good learning environment
   A functional organizational structure provides a perfect environment for learning for new employees (especially new college graduates) to be taught the real-world application of theoretical information.

Disadvantages of the Functional Organizational Structure

1. Boring
   Employees may find it boring to repeat the same task over and over and become less enthusiastic over time.
2. Leads to conflicts
   If promotions are not handled well, an employee may be discouraged if a lower-performing peer is promoted over them. Problems may arise among management if department heads are only focused on their department and do not communicate effectively with other departments.
3. Poor communication
   This can cause poor communication and “silos” that are too independent of one another. If employees and management are only loyal to their teams, there will be a lack of teamwork and coordination.
4. No sufficient cooperation
   One of the major weaknesses of a functional structure is the fact that there can be insufficient cooperation among different departments and management problems. Though they record high efficiency and productivity they lack coordination among functional units or departments, this has a way of slowing down productivity. Departments tend to compete against each other hence, putting their department’s interests above the organization’s.
5. Low morale
   There is usually low morale among employees in functional organizations affecting the productivity level and leading to a fall behind the target. This is because top management often changes procedures and modifies the work environment without taking input from employees on the ground. This negatively affects the morale of the employees and lowers efficiency, ultimately setting back innovation.
6. Rigid
   Lack of teamwork amongst these departments leads to a rigid structure where changes, innovations, and flexibility can be difficult to implement. An employee in any department may lack knowledge of information about all other departments. Managers tend to make decisions without consulting the department first, which can lead to problems.
7. A department can become too autocratic and put its goals above those of the organization as a whole. With so many specialists involved in a process, it is difficult to pin the blame for a specific product or service malfunction on any individual.
8. Growth
   As the organization grows larger, managing functional areas becomes challenging. Each department may start behaving like a small company, i.e., the “silo” effect. and Employees that do not learn any new skills, and their roles don’t change often, these cause stagnation.

Summary

The functional organizational structure helps run the organization’s businesses, especially those with projects that are ongoing. Most employees tend to feel secure, perform well, and tend to be highly skilled. Project managers who have limited roles or no authority in a functional organizational structure typically do not have any role in a functional organization.

Finally, Companies that are ideal to use functional organizational structure produce the same goods consistently and have routine operations. This is because a functional organizational structure has a rigid structure that provides predictable stability. An organization can adapt to any structure it requires.

But If the business mainly handles projects, it will choose a project structure. Whereas an organization dealing with operations will stick with a functional structure.

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