What is a disadvantage of a Functional Organisational Structure?

A Functional Organisational Structure is designed around specialized departments, each focusing on a specific function, such as finance, marketing, or production. While this structure can enhance efficiency and clarity within individual departments, it can also lead to certain disadvantages, one of which is the potential creation of silos between departments.

When departments operate in isolation, it can hinder communication and collaboration across the organization. Employees may prioritize the goals and objectives of their department over the overall goals of the organization, leading to a lack of cohesion. The focus on functional expertise might result in departments not sharing important information or resources with one another, which can negatively impact the organization’s ability to respond to changes in the market or to work on projects that require input from multiple departments.

This is in contrast to other aspects of a Functional Organisational Structure that can lead to enhanced flexibility, improved communication, and encouraged skill sharing, which are all discussed in the other options. However, while those characteristics usually benefit organizational performance, they may not fully negate the risk of inter-departmental silos forming.