Functional structure will produce drawback such as <u>cascading effect of errors (C)</u> that lead the nits to become territorial and refuse to share ideas across units.
Functional structure is an organizational structure where a company divides its employees based on their specialization and capabilities. Functional structure is effective for some companies with large volume of standardized produc or service sales, large fixed asset base, and minimal changes in technology.
However, functional structure also have many disadvantages. They are:
- Weakening of common bonds
- Lack of coordination
- Territorial disputes
- Segregation
- Unhealthy working competition
Functional structure makes units become relatively isolated from each other. This structure will make the commond bond that emphasizes a single overarching organizational purpose is weaker than in an organization with high cross-unit interactions. Functional structure makes having and understanding a common organizational purpose to be hard to execute.
The lack of coordination happens because of lack of communication and the isolated groups structure across the organization. Many units leaders may become uncare with other units difficulties and limitations. They become not respond helpfully or in a timely way because they don't feel that others' difficulties are part of their problems. By the time the need for cooperation has been established, the moment when cooperation would have been most effective may already have passed.
Territoril disputes may happen when any disagreement over goals, budgets, or any other issues came up from a clash of egos when each department has its own separate functional structure or a strong sense of common purpose is lacking. Each units fears of being eliminated if they fail to achieve their units target and underperfomed.
Segregation happens because the isolated group structure means that teams become siloed. Employees in different teams do not get the oppotunity to meet and share perspectives. This condition could be harmful for the business in the long run because of the limitation of perspectives.
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