Evaluate the advantages and disadvantages of the organisation structure in your organisation

Evaluate the advantages and disadvantages of the organisation structure in your organisation (or an organisation with which you are familiar) and evaluate the advantages and disadvantages of one other organisation structure. Within the evaluation, you should include the reasons underpinning the structure. (5CO01 ac 1.1)

Analysis of the two organisational structures follows, which are functional and matrix, through their respective advantages and disadvantages and the reasons for their design.
Functional Structure
Functional organisation structure arranges the employees according to their role or function within the company, such as marketing, finance, and human resources. This is the most common application an organisation can have with the aim of achieving efficiency and specialization. In this design, operational efficiency is boosted since an individual can concentrate on what he specializes in, hence increasing productivity and performance.
Benefits
1. Specialization: As employees work within their allocated functions, they become specialized and provide top quality but also more efficient functioning.
2. Role Clarity: Properly defined duties and responsibilities reduce these types of misunderstandings and increase members’ accountability to others.
3. Cost Efficiencies: Organisations can reduce down operational costs due to reduction in redundancy and streamlining of operations.
4. Simplified Management: This enables the concerned managers to focus on their functional areas, whereby performance can be more easily monitored and improvements implemented.
Disadvantages
1. The Silo Effect: This department isolation leads to poor organisation-wide communication and collaboration, in turn suffocating new innovation.
2. Rigidity: The rigid hierarchy may hinder responsiveness to the market and customer needs, as decisions might need to take approval from various levels of management.
3. Narrow Vision: An employee may develop a parochial view of the goals and objectives of the organisation, as most of their attention is focused on the functional area rather than on business strategy.
4. Slow Decision-Making: The need for multiple approvals can slow down decision-making processes, affecting the organisation’s agility.
Matrix Structure
Conversely, the matrix organisational structure merges the functional and the divisional organisational structures to create a pluralistic dual chain of command. The employees have direct accountability to both a functional manager and a project or a product manager. This organisational structure is hence, in use by many organisations that require flexibility in the integration of many projects or across product lines.
Advantages
1. Better cross-functional cooperation: The matrix structure provides the system for closer communication and interaction between different functional areas, leading to the possibility of better innovative solutions.
2. Flexibility: Job resources and skills would be reassigned at last-minute notice to another project depending on market fluctuations.
3. Balanced Solution-Making: Involvement of the functional and project management means well-informed, all-encompassing decisions.
4. Skill Development: Staff are exposed to many functions and projects and improve upon their skills and careers.
them
1. Confusion and Conflict: The dual structure may sometimes enable a member to have two bosses with diverse interests, priorities, or emphasis, thus triggering confusion and conflicts between managers.
2. Resource Allocation Challenges: Resource balancing across all projects covers great difficulty in considering that the majority suffers from scarce resources and is therefore drawing back others’ success.
3. Complexity Increases Management: The coordination required among several managers may increase the complexity of management processes and decrease the speed of decision-making.
4. Overload: An employee can become stressed with a lot of work or expectations from several bosses.
The functional structure is beneficial to an organisation rotating around efficiency and specialization, such that it can suffer from communication barriers and rigidity. On the other hand, while the matrix structure will this time be helpful towards teamwork and flexibility, it bears complication as well as potential conflict in management. In this sense, organisations must be very careful in consideration of their goals, together with strategies and the nature of work, in selection of a suitable mode of structural support towards their operations.

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