Everything you need to know about Functional Organizational Structure. A functional organization is one in which work is organized on the basis of specialization. Thus, expert staff personnel pass instructions directly to line personnel without taking the route of for­mal command-chain. This form of organization was devised by F.W. Taylor, the father of Scientific Management.

Functional Organizational Structure has developed from increasing complexity of business operations, par­ticularly in production department, and the need to have specialists to aid line personnel.

Functional organization in one form or the other exists in all business concerns, particularly at the top. The very division of the total activities of a business concern under production, marketing, finance and person­nel, is an example of functional organization.

Learn about:- 1. Features of Functional Organisational Structure 2. Advantages of Functional Organisational Structure 3. Disadvantages of Functional Organisational Structure 4. Taylor’s Functional Foremanship.

Functional Organisational Structure: Features, Advantages, Disadvantages and Taylor’s Functional Foremanship

Functional Organisational Structure – Features, Advantages and Disadvantages

Under functional organisational structure, the organisation is divided into a number of functional areas. Each department is managed by functional expert in that area. All activities are grouped together according to certain functions like production, marketing, finance, personnel, etc., and are put under the charge of different persons. All the persons in the organisation dealing with a particular function are put under the charge of a person controlling that particular function. The person in charge of a function is a specialist in it and brings out the best in himself.


Every functional area serves all other areas in the organisation. For example, the purchase department handles purchases for all departments. The executive head of the function issues orders throughout the organisation with respect to his function only. For example, the personnel manager will decide the issues related to salary, performance appraisal, promotions, transfers etc., for every employees in the organisation whether he/she is in finance department, marketing department, etc.

Thus, an individual in an organisation receives instructions from several functional heads. The functional expert exercises functional authority over subordinates in other departments.

Features of Functional Organisational Structure:

Following are the features of functional organisation:


(i) The whole task of the organisation is divided into different functions.

(ii) Each function is performed by a specialist.

(iii) The functional head is in charge of the activities of his function in the whole organisation.

(iv) Functional heads operate with considerable independence.

Advantages of Functional Organisational Structure:


Functional organisation has the following advantages:

1. Specialisation:

This type of organisation has the benefit of having specialists in each area. The work is performed by those who have the specialist knowledge of that work. The workers have the advantage of getting instructions from specialists. This makes possible the fullest use of energy in the organisation.

2. Increase in Efficiency:

There is a division of labour up to manager level. Planning and execution are also separated. This helps to increase the overall efficiency in the organisation. The workers get guidance from expert supervisors and this enhances their performance at work.

3. Scope for Growth:

The functional organisation provides wide scope for growth and mass production. The employment of specialists at various levels of work enables the organisation to grow as per the needs of the situation.

4. Flexibility:

Functional organisation allows changes in organisation without disturbing the whole work. The span of supervision can also be adjusted according to the requirements.


5. Relief to Top Executives:

Top executives are not unnecessarily burdened as happens in line organisation. The line officer is supposed to be a jack of all trades and is burdened with all types of works. On the contrary a specialist is a master of his line and he has the expertise and capability of taking his own decisions.

6. Economy of Operations:

The use of specialists helps in controlling the waste of materials, money and time. The consolidation of activities leads to optimum use of facilities like office accommodation, plant and machinery, etc.


7. Better Supervision:

Every superior is an expert in his own area and he will be successful in making proper planning and execution. The superiors being well acquainted with the work, they will be able to improve the level of supervision.

8. Democratic Control:

This type of organisation eliminates one man control. There will be a joint control and supervision in the organisation. This boosts the morale of employees and also enthuses a sense of co-operation among them. The democratic approach motivates workers to go deep into their work and make suggestions for work improvement.

Disadvantages of Functional Organisational Structure:


Following are the disadvantages of functional organisation:

1. Conflict in Authority:

The principle of ‘unity of command’ is violated in functional organisation. A subordinate is answerable to many bosses. Every superior considers his work important and wants the workers to give top priority to his assignment. The workers feel confused and are unable to decide about the priorities of their work.

2. Lack of Co-Ordination:

The appointment of several specialists creates problems of co-ordination, especially when the advice of more than one is needed for taking decisions. Specialists try to give more importance to their work as compared to other areas. This creates conflicts among specialists and co-ordination becomes a problem.

3. Difficulty in Fixing Responsibility:


Since there is no unity of command, it becomes difficult to fix responsibility for slackness in work. So many persons are involved in completing a work and everybody tries to blame others for low performance.

4. Delay in Taking Decisions:

The involvement of more than one person in decision-making process slows down it. The speed or action tends to be hampered by the division of authority. Much time is taken in consulting different specialists prior to decision-making.

5. Poor Discipline:

The division of authority creates problem of discipline. The workers have to obey many bosses, their loyalty becomes divided. Discipline tends to break down not only among workers but also among lower level supervisors.

6. Expensive:


Multiplicity of experts increases overhead expenses of the organisation. A number of specialists are appointed for manning various lines of work. These persons being specialists, they demand much higher emoluments. Small units cannot afford to have functional organisation.

7. Group Rivalries:

The emergence of many persons of equal status encourages group rivalries among executives. Persons connected with different fields try to create their groups and then rivalry starts among these groups. Every group tries to dominate the other. The growth of the unit is adversely affected in a vicious atmosphere.

Functional Organisational Structure – Functional Foremanship, Merits, Demerits and Suitability

Organization of Work Based on Specialization:

A functional organization is one in which work is organized on the basis of specialization. Thus, expert staff personnel pass instructions directly to line personnel without taking the route of for­mal command-chain. This form of organization was devised by F.W. Taylor, the father of Scientific Management.

Functional departments provide support and advice to the line managers in respect of work study, maintenance of machines, purchase of materials, control of inventory, and quality control. In their absence, the line managers will be required to perform these functions on their own.


Functional organization has developed from increasing complexity of business operations, par­ticularly in production department, and the need to have specialists to aid line personnel. Functional organization in one form or the other exists in all business concerns, particularly at the top. The very division of the total activities of a business concern under production, marketing, finance and person­nel, is an example of functional organization.

Provision for all Activities:

Work allocation among different departments should cover all activities. For each activity there should be one or the other individual or department to perform it. However, duplication in allocation of activities is avoided—the same activities should not be allocated to two or more individuals or departments.

Activities allocated to any department should be inter-related. At least, they should not be as dif­ferent from one another as industrial engineering and market research, or production planning and advertising.

Functional Organization at the Top:

Functional grouping of activities at the top level results in creation of a separate department for each major activity. Thus, there is a department each for production, marketing, finance and personnel functions.


Only the head of a functional department—personnel, sales, finance, etc.—will command sub­ordinates irrespective of the departments in which they are working. Thus, personnel manager will decide matters relating to selection, wages, promotion, etc. of each subordinate irrespective of the department to which he is attached—production, sales, or finance.

A functional department will only handle activities assigned to it—for example, production manager will only concern him­self with production of goods and services but will not be involved with procuring and training manpower or deciding their terms of service—in other words, functions that fall within the pur­view of the personnel department.

Functional Organization at the Bottom:

Taylor recommended functional organization of activities even at the shop floor level. He felt that a foreman should not be burdened with looking after each aspect of his work—planning, maintaining record of work done by each worker, machinery repairs or disciplining workers. There should be spe­cialists to advise and support him in each of the other tasks.

In the Bethlehem Company where he worked, Taylor experimented with the following arrange­ment and found it useful for effective planning and controlling:

A. In the Planning Department:

1. Route Clerk – He will map out the sequence of all manual and mechanical operations.

2. Instruction Card Clerk – He will write down instruction as regards the manner of handling each task.

3. Time and Cost Clerk – He will fix the dates of start and completion of each task and calculate the direct cost of goods produced.

B. In the Factory:

1. Gang Boss – His job will be to see that machines and men are always kept ready to carry out production operations.

2. Speed Boss – He will ensure that that each task is completed within the time schedule.

3. Inspector – He will keep check on the quality of goods produced.

4. Repair Boss – He will ensure that machines and tools in the factory are all in working order.

C. For the Entire Job:

Disciplinarian – He will ensure that each task is executed in a systematic, disciplined manner and on time.

‘Functional Foremanship’:

Taylor called this system—specialists advising and supporting line people—’functional foremanship’. He said specialists should be experts at handling their respective jobs. As they are appointed to direct and control production processes and functions at the shop floor, workers assigned the various task should work according to the orders of specialists in respective areas.

A foreman cannot alone perform the functions assigned to the eight specialists—he may lack the required skill sets or experience for the purpose. In any case, it would be unreasonable to expect him to decide on the route of tasks performed by each worker, determine the timeline and cost of each operation and keep machines and tools in working condition 24×7.

And, most important, it may not be possible for him to discipline coworkers performing their tasks—he would need to be a psychologist and technical expert to perform the functions of eight experts.

Merits of Functional Organization:

(1) Each Worker does what He can do Best:

Functional organization promotes logical division of tasks and activities based on individual spe­cialization.

(2) Repetitive Performance of Same Task Raises Efficiency:

Since a person is engaged in performance of the same task on continual basis, he develops expertise, and hence efficiency, in performance.

(3) Relief to Line Managers:

A functional organization relieves line managers of performance of routine tasks in which they may not have expertise. Relieved of this job, they can concentrate on their core duties.

(4) Facilitates Production on Mass Scale:

A functional organization promotes specialization which results in standardization of tasks. A busi­ness can benefit from this and undertake mass production of goods.

(5) Economical:

A functional organization is cost-effective. It has specialists for each routine activity, such as person­nel recruitment and training, procuring finance, and marketing. So it is spared the need to recruit line managers with expertise in each individual area. In the present global setup, multi-national firms and companies appoint a few specialists and make them keep moving across the world to assist their operations taking place in different countries. It is a different matter, though, that con­stant travels leave the specialists little time for their families.

Demerits of Functional Organization:

(1) It Gives Rise to Complex Relationships:

In a functional organization, there are many cross-relationships between individuals and departments. Further, because a manager/subordinate is required to comply with orders of a number of specialists, he is confused which specialist to listen to first. In a government, for example, education department may want to reward excellence but cannot do so because the finance department may not provide necessary funds.

(2) It Creates Difficulty in Coordination of Activities:

Existence of several specialists may make it difficult to coordinate the activities required to accom­plish organizational activities, particularly when experts have different viewpoints on the necessity of any particular course of action. Purchase manager may not listen to finance manager; production department may award contract for supply of material to a supplier who defaults. This may result in failure to supply finished goods to the dealers.

(3) It Discourages Individual Creativity and Initiative:

Because there are several superiors to direct a worker, he has neither desire nor time to develop alter­native models or methods to perform his task.

(4) It Spends Huge sums on Specialists:

For reason of their specialization, specialists claim and get astronomical salaries and other benefits, particularly if they have to offer assistance to workers spread across the world. However, firms and companies willingly do so as it is still less costly than having specialists at each workplace.

Suitability of Functional Organization:

Functional organization can be suitable for all kinds of organizations – big or small, labor-intensive or machine-intensive.

Functional Organisational Structure– Advantages and Disadvantages

As the name implies, the whole task of management and direction of subordinates should be divided according to the type of work involved. Really speaking, almost all business concerns have got some sort of functionalisation at the top. For example, most of the business houses have separate departments to look after production, sales and the general office.

The functional management carries this idea to its logical limit and divides up management into a number of functions, such as, production, research and development, personnel, purchasing, finance, office management and sales. Each one of these departments would serve the rest of the organisation.

The personnel department, for example, would recruit, train and deal with the people required for all the other departments. The purchasing department would handle purchases on behalf of the entire concern.

While dividing management into such departments care should be exercised to see-

(а) That the entire work has been divided into various departments so that there is no activity which has not been allotted to one department or the other;

(b) There should be no duplication in the sense that an activity should not be allotted to more than one department; and

(c) The work allotted to one department should consist of interrelated jobs. For example, it would be absurd to allot canteens and dispensaries to the purchase manager.

F.W. Taylor, the founder of scientific management, recommended that there should be functionalisation even at the shop level where workers have to produce goods, instead of the usual practice of putting one foreman in-charge of 20 to 30 workers, he recommended that there should be the following staff-

1. Route Clerk – The person who would determine how a particular piece of work is to be done and lay down the path of material through various stages of manufacture.

2. Instruction Card Clerk – The person who would lay down the exact method of doing a piece of work.

3. Time and Cost Clerk – The person who would lay down the standard time for the completion of the work and who would compile the cost of that piece of work.

4. Shop Disciplinarian – The person who would deal with cases of breach of discipline and absenteeism.

5. Gang Boss – The person whose task it would be to assemble and set up various machines and tools for a particular job.

6. Speed Boss – The person whose task it would be to determine at what speed the machines should be run for the efficient completion of the job.

7. Repair Boss – The person in-charge of keeping the machines in efficient working order.

8. Inspector – The person who would check the quality of work done.

He thus divided the work of production in a metal working plant and called the specialised foremen as functional foremen.

It will be seen that under this system workers would have to deal with eight foremen instead of one.

At the higher levels, functional organisation refers to the structure that is formed by grouping all the work done into major functional departments or divisions.

All related and similar work is placed in one department or division under one executive. Thus the marketing manager will be responsible for all marketing work of the company, of all the plants and for all product lines. Similarly, the Personnel Manager will have direct authority over the personnel in other departments in respect of personnel matters like pay, discipline, etc. A subordinate anywhere in the organisation will be commanded directly by a number of managers each exercising direct functional authority in his own field.


(а) It ensures a greater division of labour and enables the concern to take advantage of specialisation of functions.

(b) It makes for a higher degree of efficiency as the workers and others in the organisation have to perform a limited number of operations.

(c) It ensures the separation of mental and manual functions.

(d) It facilitates mass production through specialisation and standardisation.


(a) It is unstable because it weakens the disciplinary controls, by making the workers work under several different bosses.

(b) It is too complicated in operation because it entails the division of functions into a number of sub-functions. This also leads to lack of co-ordination among the workers.

(c) It makes difficult for the management to fix responsibility for unsatisfactory results.

(d) It may also lead to conflict among foremen of equal rank.

Control becomes weak because workers are commanded not by one person but a large number of people. Thus, there is no unity of command.

Because of multiple authorities, it is difficult to fix responsibility.

On the whole, this system has been quite successfully followed in big concerns for division of work at the top. But for division of work in various departments themselves the system has not been found to be very successful chiefly because there is no clear line of authority.

Functional Organisational Structure – Advantages and Limitations

Whole task of management and direction of subordinates should be divided according to the type of the work involved. The functional management carries this idea to its logical limit and divides up management into a number of functions such as production, sales, finance and personae, and research and development etc. Each of these departments would serve its best for the organization.


(i) It ensures a greater division of labour

(ii) It improves the efficiency of the organization.

(iii) It brings specialization and innovations.

(iv) It facilitates mass production.


(i) Strict enforcement of discipline is questionable.

(ii) Creates complexity in structuring activities.

(iii) Readability cannot be fixed effectively.

Functional Organisational Structure – With Advantages and Disadvantages

Under the line type of organisation, one person is in charge of all the activities relating to a department or section but there is a difficulty of getting men with sufficient capacity and training who can look after all the activities efficiently. Taylor, recognising this limitation, proposed a functional type of organisation. Under this type of organisation, men with special abilities or training in a specialised function may be employed. The specialists will be performing the functions which are common to different departments under one organisation.

Thus, under the functional type of organisation, identical functions of various departments in an organisation are performed by a specialist, while in a departmental line organisation, one person looks after all the activities of the department of which he is the head. The workers under functional type of organisation receive instructions from a specialist in each of several supervisory functions which are assigned to the different specialists.

F.W. Taylor recommended a functional organisation of activities at the shop floor level. He was of the view that the foreman should not be burdened with too many activities and instead, he should be assisted by a number of specialists in solving the problems of a technical nature.

F.W. Taylor has recommended the following specialists:

In the Planning Department:

(1) Route Clerk – His function is to lay down the exact route through which each and every piece of work should travel in the various stages of manufacture.

(2) Instruction Card Clerk – His function is to issue the necessary instructions to workers with regard to the manner in which they have to handle the job assigned to them.

(3) Time and Cost Clerk – He prepares the standard time for the completion of work and compiles the cost of that piece of work.

In the Factory:

(1) Gang Boss – His work is to see that the various machines and materials are kept ready for workers to perform their operations.

(2) Speed Boss – His is concerned with prescribing of proper speeds for the machines.

(3) Inspector – His work is to check the quality of work done by the workers.

(4) Repair Boss – His function is to look after the maintenance of machines for the entire job.

(5) Disciplinarian – He enforces the rules and regulations of the organisation so that each job is performed in a systematic and perfect manner.

Functional Foremanship:

Taylor called functional type of organisation “Functional Foremanship.” The eight persons mentioned above are specialists in their jobs. The workers under this type of organisation are required to take orders from all the eight specialists. Taylor introduced this functional foremanship, because otherwise a single foreman has to look after all the functions. But no single person does have the capacity to perform all the functions.

Functional Organisation at the Top:

At the higher levels, Taylor’s functional system involves the grouping of all functions into major functional departments and entrusting each department to one executive. For instance, the personnel manager may be entrusted with personnel matters relating to all the departments, the marketing manager with the responsibility for marketing of all the products of all the plants and so on. Another feature of this type of organisation is that the line executive receives orders not only from his line boss but also from one or more specialists.

A foreman in the production department may receive orders from the superintendent who is his line boss and also from the staff officers such as Financial Controller, Marketing Manager, Personnel Manager, etc.

Functional organisation is an organisational structure which combines all aspects of one activity or several related activities which are called “Functions” such as production, finance, marketing, HRD etc. It is structured according to products dealt or service rendered in the organisation. It is the most logical and basic form of departmentation. Functional organisation leads to specialise in business skills. It also makes it easier to mobilise specialised skills to needy areas of the business.

Advantages of Functional Organisation:

1. Specialisation – It ensures maximum use of the principle of specialisation at every work point.

2. Efficiency – Since the workers have to perform a limited number of function, their efficiency would be very high.

3. Mass Production – Due to specialisation and standardisation, large-scale production can be undertaken without much inconvenience.

4. Co-operation – As there is no scope for one-man control in the organisation, there is the possibility of promoting cooperation.

5. Relief to the Executives – Since instructions from specialists flow directly to the lower levels, the line executives are free from worries about the technical problems faced by the workers.

6. Flexibility – Any change in the organisation can be introduced without disturbing the whole organisation and hence there is an element of flexibility in this type of organisation.

Disadvantages of Functional Organisation:

1. Conflict amongst Foremen – Under this type, foreman of equal rank will be many in number and this may lead to conflict among them.

2. Discipline – Since workers have to work under different bosses, it is difficult to maintain discipline among them.

3. Lack of Co-ordination – There are several functional experts in the organisation and this may create the problem of coordination.

4. Speed of Action – As control is divided among the various specialists, narrow perspectives are created and the speed of action is very much hampered.

5. Lack of Fixed Responsibility – If there is any unsatisfactory progress, it is difficult for the top management to fix responsibility.

6. Expensive – As a large number of specialists to be appointed under this system, it is very expensive and small firms cannot afford it.

Functional Organisational Structure – Features, Merits, Demerits and Taylor’s Functional Foremanship

Functional authority occupies a mid-way position between line and staff authority. It is a means of putting the specialists in top positions throughout the enterprise. It confers upon the holder of a functional position a limited power of command over the people of various departments concerning their function.

Functional authority remains confined to functional guidance of different departments. It helps in maintaining quality and uniformity of the performance of functional areas throughout the organisation.

Under functional organisation, various activities of the enterprise are classified according to certain functions like production, marketing, finance, personnel, etc., and are put under the charge of functional specialists. A functional incharge directs the subordinates throughout the organisation in his particular area of business operation.

That means that subordinates receive orders and instructions not from one superior but from several functional specialists. In other words, the subordinates are accountable to different functional specialists for the performance of different functions.

It was F.W. Taylor who evolved functional organisation for planning and controlling manufacturing operations on the basis of specialization. But in practice, fictionalization is restricted to the top of the organisation structure and is not carried down to the lowest level in the organisation as recommended by Taylor.


The features of functional organization are as follows:

(i) The entire organizational activities are divided into specified functions, such as operations, finance, marketing, personnel relations, etc.

(ii) Each functional area is put under the charge of a functional specialist. The specialist has the authority or right to give orders regarding his function whosesoever that function is performed in the enterprise.

(iii) If anybody in the enterprise has to take any decision relating to a particular function, it has to be in consultation with the functional specialist.

Merits of Functional Organisation Structure:

The merits of functional organisation have been discussed below:

(i) Specialization – Functional organisation helps in achieving the benefits of specialization of work. Every functional incharge is an expert in his area and can help the subordinates in better performance in his area.

(ii) Executive Development – A functional manager is required to have expertise in one function only. This makes it easy to develop the executives.

(iii) Reduction of Workload – Functional organisation reduces the burden on the top executives. There is joint supervision in the organisation. And every functional incharge looks after his functional area only.

(iv) Scope for Expansion – Functional organisation offers a greater scope for expansion as compared to line organisation. It does not face the problem of limited capabilities of a few line managers.

(v) Better Control – The expert knowledge of the functional managers facilitates better control and supervision in the organization.

Demerits of Functional Organization Structure:

The functional organization suffers from the following drawbacks:

(i) Functional organization violates the principle of unity of command since a person is accountable to a large number of bosses.

(ii) The operation of functional organisation is too complicated to be easily understood by the workers. Workers are supervised by a number of bosses. This creates confusion in the organisation.

(iii) Functional organisation develops specialists rather than generalists. This may create problem in succession of top executive positions.

(iv) A functional manager tends to create boundaries around him and thinks only in terms of his own department rather than of the whole enterprise. This results in loss of overall perspective in dealing with business problems.

(v) There is generally a lack of coordination among the functional executives and delay in decision­-making when a decision problem requires the involvement of more than one specialist. Jurisdictional conflicts often arise between the line and functional executives. Executives with functional authority sometimes issue instructions directly to personnel throughout the organisation.

This happens because of failure to define the exact nature of the functional authority which an executive may have. Therefore, it is essential that the functional authority of executives should be clearly laid down. As far as possible, the accountability of subordinates should rest with their line superiors and not with their functional bosses.

Taylor’s Functional Foremanship:

The functional organization design is somewhat different from F.W. Taylor’s functional foremanship. The structure stands for fictionalization at the top whereas in Taylor’s plan, the functional control went down to lowest level in the organization. Taylor felt that one foreman cannot manage the different aspects of production work for directing a group of employees as he cannot have varied knowledge and ability.

So he advised the substitution of line authority by functional foremanship at the lower levels of the Organisation structure.

Taylor recommended that instead of the usual practice of putting one foreman in charge of 10 to 20 workers, there should be the following staff to guide the workers in various functional areas.

(i) Route clerk.

(ii) Instruction card clerk.

(iii) Time and cost clerk.

(iv) Shop disciplinarian,

(v) Gang boss.

(vi) Speed boss.

(vii) Repair boss.

(viii) Inspector.

There is functional relationship in the structure because every worker is responsible to the speed boss in the matter of discipline and so on. This is the extreme form of functional organisation which is not found anywhere because it has been found to be unrealistic and it violates totally the principle of unity of command.

In order to maintain unity of command in the organisation, fictionalization is applied at the top structure and the functional authority is limited only to the first level that comes below the position of the functional manager.

Functional Organisation

Recognising the limitations of line-type of organisation, viz., getting men with sufficient capacity, training and adaptability. Frederick W. Taylor proposed a functional foremanship organisation. He thought that to be successful in performing multitudinous requirements of the foreman in expanding enterprise, a well-rounded man must possess at least six out of nine qualities, viz., “brains, education, special or technical knowledge, manual dexterity or strength, tact, energy, grit, honesty, judgement or common sense, and good health.”

Hence he discovered functional organisation on the following basis:

(a) To make use of the principle of specialisation.

(b) To bring about organisational balance.

So, one can see, under this type of organisation, men with special abilities to perform specific functions, may be employed, and thus the benefit of specialisation can be enjoyed by the organisation. This will indeed lead to the organisational balance by using the services of specialists in the required functions.

Under this plan, the lowest worker in the organisation can get the benefit of the services of the specialists who will be performing their functions that are common to different departments under one organisation. One should note, therefore, the difference between departmental line organisation and functional organisation.

In the former type of organisation, viz., departmental line organisation, one boss is entrusted with all activities of the department of which he is supposed to be the head; while in the latter type of organisation, identical functions of varied departments are pooled and are performed by a specialist.

The plan, thus, can be said to have been based upon the principle of “division of labour”. It can be emphasised here that this plan divides the personnel according to the supervisory functions with the object of developing higher degree of proficiency by separating the manual from the mental requirements.

Thus, work is assigned strictly according to the specialisation which enables workers to work under different bosses as and when their services, in different departments regarding specialised but common functions are needed. F. W. Taylor, however, has divided supervisory functions into two groups-

(i) The office or planning division, composed of:

(a) An order-of-work or route clerk;

(b) An instruction-card clerk;

(c) A time-and-cost clerk; and,

(d) The shop disciplinarian.

(ii) The shop foremen of the factory division, consisting of:

(a) The gang boss;

(b) The speed boss;

(c) The inspector; and

(d) The repair or maintenance foreman.

To give an exact picture of functional type of organisation, we quote what F.W. Taylor, the father of this plan, wrote- “Functional organisation consists in so dividing the work of management that each man from the assistant superintendent down, shall perform as few functions as possible.

If practicable the work of each man in the management should be confined to the performance of a single leading function.” Further, the functional type of organisation, according to Taylor, is “the most marked characteristic of functional management lies in the fact that each workman, instead of coming in direct contact with the management at one point only, namely, through his gang boss, receives his daily orders and help directly from eight different bosses, each of whom performs his own particular functions.

Four of these bosses are in the Planning Room, and of these, three send their orders to and receive their returns from the workmen, usually, in writing. Four others are in the shop and personally help the men in their work, each boss helping in his own particular line or function only.

Some of these bosses come in contact with each workman for so short a time each day that they can perform his function for but a new men, and in this particular line, a number of bosses are required, all performing the same function but each having particular group of men to help.

Thus, the grouping of men in the shop is entirely changed, each workman belonging to eight different groups according to the particular functional boss whom he happens to be working under, at the moment.

Functional Organisation – Advantages and Disadvantages

As the modern business functions are very much complicated, the manager at the top alone cannot take decision on certain specialized matters. In such cases, he needs advice from the people who have technical ability in the matter concerned. For example, when district collector has to deal draught situation or any epidemic health problem, he may lack of specialized knowledge in the problem concerned.

Then he may take advice from an environmental specialist or from the district health officer as the case may be. So also in industrial concerns, the general manager may take advice from personal manager when he wants to take decision regarding recruiting suitable persons for the jobs, or he can take advice from production manager when a production problem arises. In fact every organization while have functional organization to certain extent.

The line manager is responsible for making decisions and the staff managers may assist the line managers in making decisions. The line manager, while making a decision, may take the advice given by the staff manager into account or simply he may neglect. But ultimately line manager is responsible for the results obtained by the decision made by him. A staff function is a support function. In this type of organization, the whole work of the organization is divided on functional basis.

This is to say one particular department will look after the affairs of a particular function, which is needed by entire organization. For example, personal department will recruit all the workers required by various departments of the origination and train them. Similarly, materials department will purchase and supply materials required by all other departments.

F.W.Taylor, the father of scientific management, introduced functional type of organization. He has extended his functional management theory even at the lower levels also, i.e. he advised that there should be separate foreman at shop floor to look after specified activities.

He recommended the following staff for various works:

(a) Route Clerk – He decides the actual path to be traveled by material during production of a product.

(b) Instruction Card Clerk – The duty of this clerk is to lay down the exact method of doing the product, in the form of instructions.

(c) Time and Cost Clerk – This clerk will estimate the time required to do a job and work out the cost of production.

(d) Shop Disciplinarian – This clerk will deal with absenteeism and with the cases where rules of discipline are not followed.

(e) Gang Boss – He has to look after the various machines and tools and give instructions to set the machine.

(f) Speed Boss – He has to see that the machine is operated at correct speed and to see that the work is completed as per the schedule.

(g) Repair Boss – He has to bother about the maintenance and repair of machines to see that the machine availability is increased.

(h) Inspector – He is responsible for the quality of the work.

He called each of the above persons as functional Foreman and kept them in-charge of specified work. In this type of organization, the worker receives instructions from many bosses (foremen) instead of one. At higher levels all related works are clubbed together on functional basis and each department is allocated one function.

Advantages of Functional or Staff Type of Organization:

(a) Because of greater division of work, workers will get specialized in their trade so that the quality work pieces can be produced and waste can be reduced, so that the cost of production will be kept under control.

(b) It enables the organization to have clear demarcation between brain work and manual work.

(c) This type of organization is most suitable for a unit working on mass production techniques, as planning and design (mental) is looked after by separate people and execution of job is done by separate people (manual).

Disadvantages of Functional or Staff Type of Organization:

(a) As the workers will get instructions or orders from too many bosses, they will be in a state of confusion, because they do not know to whom they are responsible. This may spoil organizational discipline.

(b) Staff-managers will give only advice and they do not hold any responsibility.

(c) As each department will work in its own interest, the coordination between departments is very difficult.

(d) In this type of organization, there is no clear line of authority.

Functional Organisational Structure

Functional organisation was formulated by F.W. Taylor. This is the key point of functional activities. In this, major work is done by grouping the functional areas. This method of grouping aims at providing the specialist services to the organisation like coordination, skills, etc. Each individual, right from Asstt.

Superintendent to the worker at the lowest rung, has a few functions to perform in the organisation. F.W. Taylor had devised a formula, known as “Taylor’s plan for functional foremanship”. In this, a worker is responsible to eight bosses, of whom four are from the planning level and rest at shop level.

Advantages of Functional Foremanship:

i. Application of expert knowledge

ii. Efficiency

iii. Relief to line executive

iv. Mass production, and

v. Economy.


i. Complex relationship

ii. Ineffective coordination, and

iii. Centralization.

Functional organisation is suitable for small or large size organisation either machine or labour based. In functional organisation, centralisation of authority and delegation of power to lower level to be specific, so as to avoid confusion and over lapping of power in executives.

In this type of organisation, delegation of authority is given to specific functional heads of departments. The employees receive orders from more than one person for their work in this type of organisation.