Explain the concept of ‘Functional Structure’. Also, explain three disadvantages of functional structure.

Functional structure refers to the division of the whole enterprise according to the major functions to be performed by it. This is the simplest and the most prevalent form of organizational structure. Under this all the functions of similar nature are divided in different units which are called departments. Its disadvantages are:

1. Ignorance of organizational objectives: Each departmental head will work according to his sweet will. They always give more importance to their department objectives. Hence organisational objectives suffer.
2. Difficulty in interdepartmental coordination: All departmental heads may work as per their own wish. No doubt this facilitates coordination within the department but it makes interdepartmental coordination difficult.
3. Conflict of interest: Every departmental head wants to become a functional empire. To satisfy their ego, everyone demands maximum resources in their department. This situation leads to conflicts among different departmental heads.
4. Hurdle incomplete development: This system is a hurdle in the way of the complete development of the employees. Each employee specializes only in a small part of the whole job.