What Are the Advantages and Disadvantages of a Functional Organizational Structure?

A Functional organizational structure has several advantages and disadvantages when it comes to managing projects:


  • Employees do not report to multiple managers. Each employee will report to his direct functional manager. This will reduce communication channels.
  • Employees tend to learn from each other since those with the same specialty (or set of skills) are grouped together.


  • No one “manages” a certain project, a project is managed by multiple functional managers, this can lead to the following:
    • The client is not able to know what the status of the project really is, as no one can give him the whole picture. Each functional manager is able to report on his part of the project.
    • Conflicts between functional managers can have drastic effects on the progress of a project.
  • Employees tend to spend a significant percentage of their time with nothing to do, sometimes literally begging for work.

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