What characterizes the functional organization structure?

Activities are grouped by function (production, marketing, finance, IT, …), each functional area led by one executive specialist.

Features:

• All activities divided into functions (classified into basic, secondary, and supporting functions)
• Each functional area under one executive
• For any decision, you consult the functional specialist
• Limited span of control

Merits: high specialization, clarity in functioning, no duplication, satisfaction, control & coordination within functions. Demerits: needs more cross-functional coordination, blurred lines of authority, slow decision making across functions.

Suitability: becomes necessary as a small organization grows and its business becomes more complex — the natural successor to the simple line structure.

Tip: Functional silos are the security manager's daily reality: security requirements always cut across functions, which is precisely what this structure handles worst — hence security committees and matrix-style security roles.