Briefly discuss the merits and demerits of Functional Organisation.

Ans:

Merits of Functional Organisation: The merits of Functional Organisation are as under:

  1. Degree of specialization: There is a high degree of specialization because staff specialists and their advisory authority are also entrusted with limited line authority.
  2. Suitability: It is suitable for large enterprises.

Demerits of Functional Organisation: The demerits of Functional Organisation are as under:

  1. Complexity: It is a more complex type of organization than the line and the line and staff organizations.
  2. The workload of the manager: The workload is more for those managers who are entrusted with functional authority in addition to their respective authority and less for those managers who have only line authority or advisory authority,
  3. Principle of unity of command: This principle is not generally followed because the subordinates may get instructions from their immediate boss and bosses’ brother departments.
  4. Expensive: It is costly to operate and maintain because of the employment of specialists who can effectively exercise functional authority.
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