Types of Organisation structures-Functional & Divisional Structures
Organisation structure is a framework within which managerial and operating tasks are performed. It can be categorised into functional structure, divisional structure, line organisation, line and staff organisation and committee organisation.
Functional structure refers to an organisational design that groups similar or related jobs together. Features of functional structure:
• division of work into specialised functions,
• different specialists handle different functions,
• functional expert has authority to command persons and there are two types of managers available, etc.
Benefits received from using functional structure are occupational specialisation, effective control and coordination, promotion of organisational growth, increase in managerial efficiency, etc. Various disadvantages of functional structure include lesser emphasis on overall enterprise objectives, problem in coordination among different departments, etc. Causes conflict of interests between enterprise’s departments and causes inflexibility among managers. Functional structure is suitable for business enterprises with large operational size, diversified activities and operations requiring high degree of specialisation.
Divisional structure refers to an organisational design in which whole enterprise is divided on the basis of major products manufactured by it. Benefits received from using divisional structure:
• product specialisation,
• wider span of management,
• flexibility and initiative,
• growth and expansion, etc.
Various disadvantages of divisional structure are conflicts among departments, increases costs, etc. Divisional structure is suitable for business enterprises are manufacturing a large variety of products and enterprises growing tremendously and in need of more employees and departments