Study Notes

Functional structures

Last updated 22 Mar 2021

The traditional organisation structure of a business has focused on the functions, departments and main activities of a business.

The traditional functional structure is based around certain principles of organisation which have historically been seen as important, including the principles of:

Principle	What is involved
Specialisation	Employees should be a member of one specialisation or function
Authority	In every organisation, authority for taking a decision must rest somewhere + the line of authority should be clear
Responsibility	A superior is responsible for the actions of his/her subordinates
Definition	Each position in the structure has a clearly defined role and responsibility
Span of control	No person should supervise too many subordinates
Chain of command	There is a clear, unbroken line of authority and responsibility from the top of the organisation down to the bottom

The result of these principles is the common functional structure – an example of which is shown below:

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