August 17, 2017

Advantages And Disadvantages Of Functional Departmentation

Advantages Of Functional Departmentation

Following are the major benefits or advantages of departmentation by function:

1. Simplicity

Functional departmentation is simple and common form of departmentation. It is very easy to establish and operate.

2. Specialization

Functional departmentation follows the principle of specialization. Special knowledge and skill helps high level operation of the organizational functions.

3. Better Coordination

Functional departmentation facilitates better coordination among departments, different functions and employees.

4. Optimum Utilization Of Resources

Functional departmentation focuses on the optimum utilization of both human and non-human resources. This ensures positive outcome to the organization.

Disadvantages Of Functional Departmentation

Functional Departmentation suffers from the following disadvantages:

1. Conflict

In functional departmentation, there is very high chance of conflict among departments and other functional areas.
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2. Slow Decision Making

Because of numbers of specialists and experts and many departments, decision making process is slow in this type of departmentation.

3. High Supervision Cost

There are many supervisors in this type of organization. So, supervision costs is very high.

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4. Lack Of Innovation And Creativity

Functional departmentation emphasis on high level speed production by the help pf specialists and skilled employees. It emphasis on mass production and expansion. But it ignores innovation and creativity.

5. Difficult To Monitor

It is very difficult to monitor performance in this type of departmentation.