Functional Organization

          Whenever a firm's total work is divided into such basic areas as production, marketing, and finance, it is using a functional organization. Usually, however, the authority of a division head is limited to that division or that function; in all other areas, line or line and staff authority is retained. So we need more accurate definition of functional organization.
          In pure functional organization, authority and responsibility are assigned over processes or functions in several or all departments of the firm. Thus, functional managers supervise employees in several or all departments. The main feature of functional organization is that each employee has more than one boss - maybe several. This, of course, violates that sound and important one-boss principle, or unity of command. But the practice is being tried by many firms in American industry as the need for expertise grows.
          Under functional organization every employee, except top executives, may have different supervisors for such areas as personnel management, quality control, inventory control, payrolls and vacations, promotions, and transfers. These supervisors are specialists in their particular fields, and they have broad supervisory power over many or all departments of the firm. They issue orders and directives in their own name, rather that through line managers. As a result, it is easy for an employee to receive conflicting instructions.
          An example of functional organization can be found in the authority and responsibility that may be given to the personnel department. Under line or line and staff organization, the personnel department works through the employee's immediate supervisor - his or he one boss. But under functional organization, the personnel department has authority and responsibility to deal directly with each employee on all matters of employment; the line supervisor is overlooked. As noted above, still other supervisors may be established for other aspects of an employee's total work. A factory employee could review several orders from the different supervisors of quality control, production, sales, maintenance, and other areas.
          It is interesting to note that Frederick W. Taylor, the father of scientific management, established the first functional organization in the early 1900s. Under his plan, each factory worker had eight different supervisors. This proved unsuccessful because it divided the work beyond a useful point. In fact, may large firms that have experimented with pure functional organization have returned to line and staff arrangements. obviously, it is difficult to void misunderstandings and conflict under functional organization, and a strong administration is needed to make it work. Even so, some business theorist favor it because it provides the expertise needed in today's complex world.