A Steel Manufacturing Company has the following main jobs:
(i) Manufacturing
(ii) Finance
(iii) Marketing
(iv) Personnel; and
(v) Research and Development.
Which type of organisational structure will you choose for this type of a company and why? State any five advantages of this organisational structure.
Functional structure of organisation as all major functions can be performed well under separate specialised departments.
Advantages:
(i) Specialization: A functional structure leads to occupational specialization since emphasis is placed on specific functions.
(ii) Efficiency: It helps in increasing managerial and operational efficiency and this result in increased profit.
(iii) Minimises costs: It leads to minimum duplication of effort which results in economies of scale and thus reduces cost.
(iv) Better control and co-ordination: It promotes control and coordination within a department because of similarity in the tasks being performed.
(v) Proper attention: It ensures that different functions get due attention.
(vi) Ease in training employees: In makes training of employees easier as the focus is only on a limited range of skills