FUNCTIONAL STRUCTURE

 Functional Structure

• A widely used structure in business organisations is functional type because of its simplicity and low cost. A functional structure groups tasks and activities by business function, such as production/operations, marketing, finance/accounting, research and development, and management information systems. 
• Besides being simple and inexpensive, a functional structure also promotes specialization of labour, encourages efficiency, minimizes the need for an elaborate control system, and allows rapid decision making.
• The functional structure consists of a chief executive officer or a managing director and supported by corporate staff with functional line managers in dominant functions such as production, financial accounting, marketing, R&D, engineering, and human resources.
•  The functional structure enables the company to overcome the growth- related constraints of the simple structure, enabling or facilitating communication and coordination. 
• However, compared to the simple structure, there also are some potential problems. Differences in functional specialization and orientation may impede communications and coordination. Thus, the chief executive officer must integrate functional decision- making and coordinate actions of the overall business across functions. 
• Functional specialists often may develop a myopic (or narrow) perspective, losing sight of the company’s strategic vision and mission. When this happens, this problem can be overcome by implementing the multi divisional structure.