Functional division is one method of business
management. In this system, the organization is divided into various teams according to their
functions and all the teams are integrated under senior management consulting of few members.
Thus, this is a bottoms-up approach of organizational hierarchy. The functional teams could be
engineering, marketing, production, distribution, sales, etc. The idea here is to divide the
organization into focused groups or teams or sub-organizations, each of which is responsible for
one specific job. The advantage of such system is specialization
cultivation, i.e. specialists are cultivated in such teams. People who wish to be leaders in
particular discipline are a good fit for such system. Functional division also brings people of
similar skills and different experience levels together to solve problems and this concentrates
knowledge into niches to maximize the functional performance.
However, a
disadvantage is that such specialized teams lack the big picture
view (which us controlled by top management) and are concerned with their designated work. This
is counter-intuitive to the development of future business leaders. Such teams are also slow to
respond to changes in business climate it consumer demand, since only the top management takes
decisions in this regard. Contribution of each individual unit to the product development and
success is difficult to ascertain in a setup based on functional division.
Hope this helps.
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