The unit textbook concepts for our discussion this week are: Functional Organiza
ID: 447828 • Letter: T
Question
The unit textbook concepts for our discussion this week are: Functional Organizational Structure Divisional Organizational Structure Strategic Alliance Output Control Management By Objective Organizational Change Management Select one of these concepts and find a related article at Fortune Magazine: or the Wall Street Journal: (you can use the Wall Street Journal every week for your discussions in this course - try an inexpensive student subscription). search by entering your topic in the search box and you will find one (or several articles) to analyze. Remember to focus upon your selected concept in your analysis. After reviewing and analyzing one of the current events articles, post your analysis for your classmates to review.Explanation / Answer
Functional Organizational Structure:
In a functional organizational structure, an organization's reporting relationships are grouped based on specialty, or functional area. An organization can be arranged according to a variety of structures, which determine how the organization will operate and perform. Each department will have its own department head, and he will be responsible for the performance of his section. This helps the organization control the quality and uniformity of performance. In a functional structure, a common configuration, an organization is divided into smaller groups by areas of specialty (such as IT, finance, operations, and marketing). Some refer to these functional areas as "silos" entities that are vertical and disconnected from each other. Correspondingly, the company's top management team typically consists of several functional heads (such as the chief financial officer and the chief operating officer). Communication generally occurs within each functional department and is transmitted across departments through the department heads.
Advantages of a Functional Structure
Staff is managed by a person with experience in their same specialty who can adequately understand and review their work. Staffers have the opportunity to move up within their functional areas, which gives a reason for them to stay long-term. The company gets the advantage of their expertise and company knowledge over time.
Functional departments arguably permit greater operational efficiency because employees with shared skills and knowledge are grouped together by functions performed. Each group of specialists can therefore operate independently with management acting as the point of cross-communication between functional areas. This arrangement allows for increased specialization.
Disadvantages of a Functional Structure
Employees may feel bored due to the monotonous, repeated type of work and may become lazy. If the performance appraisal system is not managed properly, conflicts may arise. For example, an employee may feel demoralized when a lower performing employee is promoted. The cost of high skilled employee is higher. The departments have a self-centered mentality. The functional manager pays more attention to only his department; he usually doesn’t care about other departments.
A disadvantage of this structure is that the different functional groups may not communicate with one another, potentially decreasing flexibility and innovation. Functional structures may also be susceptible to tunnel vision, with each function perceiving the organization only from within the frame of its own operation. Recent trends that aim to combat these disadvantages include the use of teams that cross traditional departmental lines and the promotion of cross-functional communication.
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