1 ) As organizations grow and differentiate, what problems can arise with a functional structure?
Functional Organizational structure comprises of two types of Chain of command’. One is given by the Line managers to achieve Organizational goals while the other is given by the Staff managers who provide guidance, advice and support to the Line managers to achieve such goals.
So in this regard, when Organizations grow and expand; so does the managers at the higher levels. Hence there could be are various limitations when an Organization adapts Functional Structure when growing and differentiating such as:
- There is a breach of Principle of unity of command as the subordinate receives orders from both, Line and Staff managers, resulting to confusion while executing the orders. The differentiation idea of the Line and Staff managers might also be difficult to concur with each other. It further adds to the complicated state of execution of commands.
- Ineffectiveness results when there is a conflict between orders given by Staff and that by the Line officers. Therefore, the overall efficiencies of the employees lower down hampering the growth of the Organization.
- The communication may be poor between the functional units.
- The individual goals are focused more by the Line and the Staff units.
- When an Organization grows, the reaction time to accommodate itself with the changing markets, should be high. However, due to lack of coordination between the units, the reaction time reduces considerably. Differentiation thus becomes challenging.
- Differentiation requires the viewpoints of the Organizations to be open and wide. But Functional organization has higher specialization that makes the viewpoints of the units very specific hence rigid.
Therefore, in order to deal with such shortcomings, Divisional Structure of Organization is advisable when an Organization grows and differentiates. In this type of structure, Departments are formed in terms of Expertise, Geographical territories, Function, Product, Project and Combination of any of these approach.