Tag Archives: Functional Org Chart

4 Tips for Creating Functional Org Charts

Functional org chart is a popular organizational diagram usually implemented by small business companies. In this structure, organization can be grouped into separated departments by areas of specialty or function. Those departments are vertical and disconnected from each other. One functional manager is going to regulate and control one department and all functional managers are supposed to report to one top boss namely the company president or CEO. Like other org charts, functional org charts have advantages and disadvantages. To make perfect the functional org chart, here we present you four tips for creating functional org chart.

functional org chart

1. Limit the Number of Layers to Three

Functional org chart would be quite a good choice for small companies but it might cause trouble in management and generate bureaucratism ending with severe damages in company’s advancement and profits earning as it expanses to a very large one. So it is necessary to make your functional org chart within 3 layers.


2. Encourage Communications Across Departments

There is a lack of communication across departments due to the fact that employees cluster together with those who are in the same departments and have few opportunities to mingle with colleges from other departments. Besides, cross-department communication is also hindered by the increasing competitive sense among departments. With regards to long-term development of company, people need to be encouraged to communicate across departments.


3. Develop Perspective of Overall Situation

Department may ignore the big picture of the whole company with too much focus on their own group goals rather than the entire company subjectives. For instance, there may be a desire by product department to update and optimize the last product but the overall company plan is to invest in new products instead. Since employees is lacking perspective of overall situation, they may lay important emphasis on goals that they believe are significant but which are not priorities for the entire company.


4. Motivate Employees

Usually, in functional org chat, workers have fixed tasks and routine work and they may get bored and upset by monotonousness and repeatability hence it’s better to motivate employees so as to keep them energetic to achieve high degree of performance.


The org chart in this article is made with Org Chart Creator, a perfect alternative to Visio. You can view more nice templates or download software.

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Five Common Characteristics of Functional Org Chart

Functional org chart is one of several common organizational structure diagrams many companies have adopted,  and a clear depiction of how people are organized. Wherein employees are segmented basing on their skills and specialties. Usually, people are grouped into departments and made to report to and follow their department manager. Each functional manager is responsible for supervision and direction with his or her department subordinates. This article aims for explanation of functional org chart by five characteristics.

functional org chart

  1. It Fits Small Companies Well

As for small companies, their functional org charts get low hierarchy layers therefore it’s concise and clear which can make the company operate efficiently. Functional org chart performs well when the hierarchy layer is less than four. While as company expands to a very larg one,  functional org chart would be much more complicated and redundant even cause bureaucracy which would make it hard to management and organization to response to outer market quickly.


  1. One-line Reporting Rules

Unlike matrix org chart, functional org chart forms vertically. One person is required to report to only one top manager which can avoid disorders in taking directions and generate great efficiency in work. It provides employees with great opportunities to get promoted from strong sense of competition.


  1. Development of Specialists

Functional org chart puts together those with similar expertises in the same field. So workers can become better at their field through discussion and knowledge sharing. In addition, high quality in-depth training can give workers clear goals and right direction to reach them.


  1. High Productivity

Expertise generates high efficiency in work and improves productivity level. Since people with similar skills cluster in the same departments, it is possible for workers to do tasks effectively and confidently with lower rate in occurrence of work-related mistakes because of assistance and advice from their department members.


  1. Ignorance in Big Picture

Workers possibly get too much focused on their own departments’ goals to neglect cooperation with other departments ending with terrible ignorance in the big picture of their company.


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5 Functional Org Chart Templates

Functional org chart is a traditional type of org chart many companies adopt. Under this organizational structure, workers are divided into several departments based on expertise and function each person can perform.

Workers are required to get involved in duties within their departments and they have to report to their functional managers only. Functional org chart does not have project manager, which differentiates from matrix org chart where employees need to obey orders from both functional managers and project managers if employees are working on some projects. The figures below are some common functional org chart templates.

Template 1. Police station functional org chart.

police functional org chart


Template 2. Small business company functional org chart.

Small business company functional org chart template


Template 3. Software company functional org chart.

Software company functional org chart template


Template 4. Comercial company functional org chart.

comercial company functional org chart template


Template 5. Sales department functional org chart.

sales department functional org chart template


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What is Functional Org Chart

Functional org chart is a very common organizational structure that many companies follow, which is supposed to divide people into several departments according to peoples’ specialties and function they perform in the company. Persons with rich experience and profession would be appointed as department manager authorized to be totally responsible for department’s affair such as training, task allocating and promotion.

Each department has its own assignment and stays independently and functional manager is expected to report to top manager. Usually there is no project manager in this kind of organizational structure while some matrix org charts have project managers definitely. The functional org chart is suitable for companies which have daily operation work and standard procedures such as manufacturing and production industries. The figure bellow is an example of functional org chart.

functional org chart

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Functional Org Chart Introduction-Definition, Advantages, Disadvantages & Example

Definition of Functional Org Chart

The functional org chart divides people into different groups based on expertise and specialty. This structure gets involved in a great amount of process standardization within a company, with the real decision-making authority centered at the top of the organization. Employees in one department are responsible only for relevant tasks. For instance, a HR department that focuses only on recruitment & training, a sales department that only engages in sales activities, and an engineering department that only designs products and produces facilities.

Advantages of Functional Org Chart

  • Employees are instructed and trained by person with experience and profession.
  • Employees are offered chance to get promoted in their field which can make them stay longer in a company.
  • Employees with the same profession work together can accelerate knowledge sharing.

Disadvantages of Functional Org Chart

  • Team spirit is lacking in this organizational structure. Although specialized employees can often work with high efficiency, they may fail to cooperate well with colleagues from different departments.
  • It’s hard to control management. This type of org chart sets challenges for the top manager to maintain the whole company as the business expands widely. Top managers cannot give orders directly to all staff, but they have to assign the mission to several department managers. Then department managers continue to split the task to smaller parts to give them to every single person.

Example of Functional Org Chart

Functional org chart example




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Main Disadvantages of Functional Organization Structure

In the functional structure, functions are separated in different groups, resulting in some defects. Here are the major disadvantages you must consider:

  1. It will lead to poor communication and coordination across function units.
  2. There will be lack of understanding across departments.
  3. They focus more on their own goals and neglect the overall company objectives.
  4. Communication in organizations with functional organizational structures can be rigid.
  5. Slow to react in response to environmental changes.
  6. It stifles innovation when problem occurs or environment changes.
  7. The autonomy within units might increase when company grows, which cause difficulties in management.
  8. The specialization will lead to narrow viewpoint and lack of overall perspective.

org structure functional

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Main Advantages of Functional Organization Structure

Functional organization structure is optimal for small businesses or companies producing standardized goods or services. Here are the main advantages:

  1. It offers a high level of specialization.
  2. Employees are possible to become experts.
  3. Staff working skills can be effectively improved.
  4. It could enhance the work efficiency and productivity due to the specialized skills and technology.
  5. Employees are highly motivated as they see clearly their career path within the functional units.
  6. Functional specialization can minimize the cost of operation.
  7. It leads to high quality technical problem solving.

functional organizational chart

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