Functional management structure in organizations

Functional management structure in organizations

The organization has functional leaders – people who manage units, but only within their functions. There is a division of managerial labor.

Characteristic features of the Functional Management Structure

  • instead of one, management functions are performed by several functional managers
  • all subordinates have several functional managers
  • different managers perform and are responsible for different functions
  • each functional manager has the full right to dispose of matters within the competence of his position
  • within a certain function, management units are created


  • the competence of the management increases due to the specialization
  • better distribution of managerial labor
  • opportunities for specialization and qualification
  • cover all management functions


  • the unity of the order is violated
  • lack of clearly defined responsibility
  • complex connections and difficult coordination

Linear-functional structure

This structure combines elements from the previous two types. The functional units serve the line managers.

Characteristic features:

  • the line managers are assisted by specialists united in functional units
  • line managers make decisions, and functional units support this process
  • functional specialists also perform advisory functions but do not have direct administrative rights


  • they increase the quality of decision-making, because the decision is not made by only one manager, but is prepared by a circle of specialists
  • facilitates the work of line managers;
  • much of the activity is undertaken by specialists


  • the process of making managerial decisions is slowed down
  • there is a danger of these management units expanding

Management is a process of setting and achieving the goals of the organization through the implementation of five main functions: planning, organizing, coordinating, controlling, and motivating.

Apart from functions, they are also considered as phases. This is the reason for the frequent mixing of the concepts of phase and function of management. The distinction is possible only when considering the management process in a temporary and substantive aspect. In terms of content – planning, organizing, motivating, coordinating, and controlling are accepted as management functions. In a temporary aspect, they are considered as phases.

What is the organization?

The organization is a structure that arises as a result of a deliberate agreement to unite the efforts of people who will work to achieve a certain goal. “Organization” is a word of Greek origin and means “means”, “way”, “tool”. Or, with the help of the organization, some goals can be achieved.
For a group of people to be called an organization, it must meet the following characteristics:
The first is the presence of at least two people who consider themselves part of this group;
The second – the presence of at least one goal, understood as a final state or the desired result, which are accepted as common to all members of the group;
The third is the presence of members of the group who work consciously together to achieve the common goal.
If these characteristics are present, then any education can be called an organization.
In everyday life, the term organization is used in another sense. It can be analyzed from three points of view:
The first – as a system – e.g. business organization, hospital, sports organization, school.
The second – an organization can mean a level of organization in the system.
The third – organization can be understood as the activity of creating order in a system.

Basic elements of the organization

Each organization has at least a few key elements:

The people of the organization – what they know and can do well, who are the founders of the organization, and what is their competence.

The mission and goals of the organization – are they known by the society, by the employees of the organization, are they significant, do they manage to engage the employees (to create empathy in them).

The structure of the organization (the “skeleton” of the organization) – on which depends the organization of work, coordination, clarity of who, what, where, when, with whom he will do, including the overall relationship regarding the implementation of goals and mission of the organization.

The perceptions, attitudes, values ​​of the people in the organization, including the owners – in terms of how they perceive the environment in which their organization operates, are they adaptable to the trail, what are the attitudes to the work they do, to consumers, to competitors.

Formal and informal organizations

Formal organizations are created based on some pre-regulated rules. Eg. when a person wants to register a company, he collects the necessary set of documents.

Apart from formal organizations, there are also informal ones, which arise disorganizedly in the more crowded formal organizations. It is characteristic that they have their own rules and norms of behavior of the members in the respective organization and pursue specific goals and interests. The so-called “group interest” is created.

The management process refers to the creation and functioning of a formal organization. Formal organizations rarely form and explore a single goal, but it is possible.

Most formal organizations set more goals and fall into the group of “complex organizations.” All complex organizations have some common characteristics.

Each complex organization transforms resources (money, capital, etc.) to achieve a certain result (material resources – raw materials, materials; information). The transformation of resources is most noticeable in production organizations, but it also exists in non-profit organizations.

The dependence of the organization on the external environment – no organization can function without links to the external environment (suppliers, consumers, competition, money, etc.).

The organization interacts with the external environment daily. The external environment includes all other organizations, government bodies, which determine the rules that apply to the organization. The external environment acts favorably and unfavorably on the organization.



Realization of horizontal division of labor – ie. the work is divided between different levels. External expression is associated with the emergence of various professions and specialized units. It is clearly expressed in larger organizations.

Complex organizations carry out a vertical division of labor. The so-called hierarchy or vertical division of labor. The external expression of the vertical division of labor is associated with the emergence of management levels that form this hierarchy.

For an organization to realize its goals and tasks, it must coordinate the activities in all departments and the people who work in them. The person who manages is the leader. All managers carry out activities that are very common or similar. Everyone depends on their experience and qualifications and manages them differently.