Functional departmentalization has many advantages and is the most common kind of organizational departmentalization in industries and organizations. It makes supervision convenient, and people working together in one department can fix any issue more conveniently. It emphasizes the roles according to the organization and helps achieve them more efficiently.
What is Functional Departmentalization?
Functional departmentalization refers to creating departments in an organization according to their function. It does not depend much on the skill set of the employees but on their expertise and qualification. For example, someone qualified in finance would be a part of the finance department and a chemical analyst is more suited for the quality department according to their expertise. Functional departmentalization has many advantages that make it a favorite structure in medium and large-sized organizations.
Advantages of Functional Departmentalization
Functional departmentalization is one of the simplest methods of departmentalization that does not require extensive strategy-making to design or operate a department. It is easy to set up and operate with a relevant manager to supervise the department.
Functional departmentalization allows specialization in that department, leading to increased efficiency and better service. For example, when people in the marketing department work on the same goals and keep digging more strategies to improve the brand’s marketing, everyone’s marketing skills polish and they specialize in their niche.
While the cost reduction is not directly related to functional departmentalization, it helps the organization by avoiding duplication in the company. Let’s say that the company is not departmentalized; HR might hire two people with slightly different but similar expertise. However, when each department has people with designated roles, duplication of employees with the same skillset for the same function does not occur.
When people are working in the same space, they continuously update each other about their progress. The processes work through a proper channel in a department and they communicate better, causing fewer misunderstandings. When such a departmentalization structure is absent, communication issues lead to problems in performing properly.
When everyone in an organization works without functional departmentalization and reports to one person only, the supervisor is more susceptible to intermixing problems and their solutions, leading to more issues. However, when each department has a corresponding manager or director who is well-versed in that department, he can not only supervise the employees better, his expertise also helps the employees learn.
Besides the learning from the managers and seniors, new employees gain experience by observing the processes in their department. Activities and pieces of training can be conducted to improve the skills of a particular department with the same functionality without engaging the whole of the organization and disturbing productivity.
Optimum Resource Utilisation
Functional departmentalization ensures optimum utilization of human and technological resources. It enables officers in a department to learn better and efficiently utilize available resources to provide positive outcomes.
Departmentalization by function makes it easy for the higher hierarchy to evaluate the performance of a department and its employees. Departmental evaluation allows finding out if any particular department lacks resources and productivity and needs better ones. The managers and deputy managers help observe the performance of employees that contributes to appreciation and incentives eventually.
The Bottom Line
Functional departmentalization is the easiest form of departmentalization adapted in medium and large organizations with numerous employees expert in different niches. It allows the employees to express their best potential and provides beneficial outcomes to the company. One of the biggest advantages of Functional departmentalization is; it is excellent for the employer and the employee both as it makes performance evaluation and finding a solution to problems for the departments easy.
Matthew is a Co-Founder at BusinessFinanceArticles.org. Matthew was a floor manager at a local restaurant in Wales. He lost his job after the pandemic and took initiative to make a team and start the project.