This series include Organising function of management for XII Business Studies students for AISSCE preparation.

1. Organising
XII Business Studies
Functional Structure
Session : 4 Vikash Residential School

2. Prepared by Pratap Naik
Functional Structure
Learning Objectives
 Concept
 Suitability
 Advantages
 Occupational Specialisation
 Better Coordination
 Helps in increasing managerial efficiency
 Minimises Cost
 Ease in Training
 Due Attention to all Functions
 Disadvantages
 Ignorance of organizational objectives
 Difficulty in Inter-Departmental Coordination
 Inter-Departmental Conflict

3. Prepared by Pratap Naik
Functional Area
These are the various
Business Functions
or
Group of Activities
performed in an organisation.
Functional Structure
What is Functional Structure?
 Grouping of jobs according to functional area of management and organising these as separate
departments is called Functional Structure.
Production
Production
Manager
Dy. Manager
Asst
Manager
Production
Officer
Supervisor
Purchasing
Purchasing
Manager
Dy. Manager
Asst
Manager
Purchasing
Officer
Executive
Marketing
Marketing
Manager
Dy. Manager
Asst
Manager
Marketing
Officer
Sales
Executive
Finance
Finance
Manager
Dy. Manager
Asst
Manager
Finance
Officer
Finance
Executive
Personnel
HR
Manager
Dy. Manager
Asst
Manager
HR Sr.
Executive
HR
Executive
CEO

4. Prepared by Pratap Naik
Functional Structure
What is Functional Structure?
 Grouping of jobs according to functional area of management and organising these as separate
departments is called Functional Structure.
 Thus, a functional structure is an organisational design that groups similar or related jobs together.
 Each department has a functional manager, who is specialist in that function.
Example
Production, Purchase, Marketing, Finance, personnel departments
Suitability
 Large organizations producing one line of product or similar line of products
 The organisation requires a high degree of specialisation and has diversified activities and operations

5. Prepared by Pratap Naik
Advantages
1. Occupational Specialisation
 Functional structure leads to occupational specialisation as works related specific functions are
performed in a department.
 This promotes efficiency in utilisation of manpower.
 Since employees perform similar tasks within a department and are able to improve performance.
2. Better Coordination
 All the employees working within a department are specialists of their respective jobs.
 Everyone in the department knows what is expected out of them & that leads to effective control
over their activities.
3. Helps In Increasing Managerial Efficiency
 Managers of one department perform same type of function again and again
 This makes them specialized and also improves their managerial efficiency.
Functional Structure

6. Prepared by Pratap Naik
Advantages
4. Minimises Cost
 It leads to minimal duplication of efforts.
 Also economies of large scale results in lower cost.
5. Ease In Training
 Training is provided only on a limited range of skills.
 This makes training of employees easier.
6. Due Attention to all Functions
 As all the functions are performed and supervised by domain expert, each and every function get
due attention.
Functional Structure

7. Prepared by Pratap Naik
Disadvantages
1. Ignorance of Organizational Objectives
 Each departmental head gives more weight to their departmental objectives.
 Hence overall organizational objectives suffer.
 Sometimes, importance of a particular function may be overemphasized.
 This is called Functional Empires.
 Pursuing departmental interests at the cost of organisational interests creates conflict among
departments.
2. Difficulty in Inter-departmental Coordination
 All departmental heads work as per their own will and wishes
 This leads to better coordination within the department.
 When information has to be exchanged across different functional departments, coordination
becomes difficult in such a situation.
Functional Structure

8. Prepared by Pratap Naik
Disadvantages
3. Inter-departmental Conflict
 When the interests of two or more departments are not compatible, conflict of interests may arise.
 Functional empires many times lead to conflicts among departments.
 In the absence of clear separation of responsibility may also results in inter-department conflicts.
4. Lead to Inflexibility
 People may develop a narrow perspective because of same skills and knowledge base.
 They may have difficulty in appreciating any other point of view.
 Also functional heads may not lead an organisation
 As they confined to a particular area of operation do not get training for top management
positions which require experience in diverse areas.
Functional Structure

9. Prepared by Pratap Naik
Functional Structure
 Suitability
 Advantages
 Occupational Specialisation
 Better Coordination
 Helps in increasing managerial efficiency
 Minimises Cost
 Ease in Training
 Due Attention to all Functions
 Disadvantages
 Ignorance of organizational objectives
 Difficulty in Inter-Departmental Coordination
 Inter-Departmental Conflict
Recap

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This presentation is the property of the author.
Thank you !!!
Session Complete Vikash Residential School
XII Business Studies