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Explain the merits and demerits of functional organisation.
Posts: 3,285
Threads: 501
Joined: Sep 2010
Merits
The merits of functional organisation are as follows:
(1) Specialisation—It ensures a greater division of labour and enables the concern to take
advantage of specialisation of functions.
(2) More efficiency—Efficiency of workers is increased as the workers and other have to perform a
limited number of operations and they get suggestions and instructions from specialists.
(3) Separation of mental and physical functions—It ensures the separation of mental and physical
functions. This ensures better control of the working of the different sections.
(4) Economy—Standardisation and specialisation in various fields facilitates production on a large-
scale resulting in economy in production.
(5) Expansion—It offers a greater scope for expansion as compared to line organisation. It does not
face the problem of limited capabilities of a few line managers. The expert knowledge of the functional
managers facilitates better control and supervision in the organisation.
Demerits
The demerits of functional organisation are as follows:
(1) Confusion—The operation of functional organisation is too complicated. Workers are supervised by a
number of bosses. This results overlapping of authority and thus creates confusion in the organisation
(2) Lack of coordination—Under this, the work is divided into parts and sub-parts. It poses difficulties in
coordinating the functioning of different parts. Thus it is difficult to take quick decisions.
(3) Difficulty in fixing responsibility—Because of multiple authority, responsibility for poor
performance cannot be fixed easily on a particular person.
(4) Conflict-Supervisory staff of equal rank may not always agree on certain issues. Therefore, there
may be frequent conflicts which may lead to non-performance.
