The above diagram represents a functional structure used by Sudair pharmaceutical company where the organization is divided into different departments. In this arrangement, every individual serves his/her responsibility and handles a large volume of transactions within the departments (Al-Thuneibat et al., 2015).
Benefits of functional structure
Functional type of structure offers several benefits to sudair pharmaceutical company. First, it provides a chance for specialization where each department operates by itself without depending on other departments. Each department has got its staff, machines, and operations without having to share any of this. The team in each department, therefore, has a chance to concentrate on their specific jobs on a daily basis developing their skills. Example the finance department is dependent, and its staff only operates in this office without being shifted to the quality management department or any other department. Experience over time make them extra competitive, and the company can highly benefit from their expertise (Malik, 2014).
Additionally, production and efficiency are improved by this type of structure in that every worker becomes an expert in his/her functional area and can perform duties with a high speed, accuracy, and efficiency. There are minimum mistakes noted at work when this structure is applied since the workers keep upgrading in their areas of specialization (Momani & Fadil 2013). The IT specialist, for example, will develop more passion on the field of IT and yield the best results on that field.
Notably, there is the minimization of duplication of work since every function has a department in which it is carried out exhaustively, so the task is not done in any other division within that organization. The company can as well train the staff from their specific departments on their specialization to improve performance (Saudi Pharmaceuticals company, 2017). Sales, for example, are only within the marketing and sales department while all budgets are completed in the finance department as opposed to other approaches where a department dealing with sales and marketing would be handling their budgets as well.
Challenges of functional structure
This type of organizational structure poses some challenges to the company. First, there is lack of teamwork within the staff of the company since each department works as a unit and the staff members have no chance to work together as a team. Each department has its objectives and goals and therefore operates independently without minding the purposes nor the efficiency or production of the other units. Lack of cooperation between different departments of the same company might lead to failure of the company. Its important for the company to note that the failure of a single department alters with the whole operations of the organization (Whitmarsh et., al 2012). The research and development department, for example, needs to coordinate with the quality management department to yield the best production results. However, this approach discourages this.
Secondly, this structure makes it difficult for the management to have control over the company. The top management may find it hard to maintain control over the organization as it keeps expanding. When the need arises for delegation of more decision making responsibilities to the departments, the extent of autonomy also may increase making coordination of duties difficult. In this organization, for example, the top management may not even be aware of where specific units fall in the departments or how they operate because there is too little face to face coordination between the subunits and the top management. In case the company expands to cover new geographical areas it would be tough to maintain control and manage separate functions. Also, this type of structure can be quite expensive to implement. Modern infrastructure and staff are required to enable the development of independent units (Welsh & Ordonez 2014). Example the administrative department will have their separate computers, printers, and staff members as well as the finance department; however, in a different approach same computers and printers could be shared to save on cost.
Behavior changes needed to adopt functional structure
The types of behavior changes needed to adopt the functional organizational structure include structural changes where the company will have to abandon its previous structure and shift to a new one. This requires implementation of new infrastructure and power. Settings of the prior equipments and buildings have to be changed so that all the staff and equipment if one department is set to a specific standard location. In a case where the sales and marketing department and the finance department were under same management and operations, they have to be broken down and each located separately (Fan et al. 2013). If the equipment were being shared before, new ones have to be purchased, and the duties reassigned to staff members so that they stick to their specific departments. Modern computers, printers staff members among other things need to be incorporated. There may be a need for new buildings also to ensure that each unit has its location to operate from the approach does not allow two different, e.g., administration and finance to work together. Instead, they have to be separate and independent. The whole process, therefore, requires planning due to large budgets that may be involved in implementation. This change needs to be managed to avoid resistance from people and to ensure that it becomes successful by concerning the staff and the clients of the company (Spector, 2013). This can be done by informing the stakeholders of changes that the organization is about to adopt, the effects pose and the operation of the new organizational structure.
In conclusion, the functional organizational structure is an appropriate type of arrangement because it ensures that activities of the company are all controlled from the department level, reducing the work of the top management. Accuracy and effectiveness are improved since the checks are done in the specific working units. Every individual gets to love what they do in the company and works to the maximum to achieve their long-term and short-term goals. The employee work keeping in mind their specific daily task as opposed to other types where the staff have a tension that they might be shifted to other jobs at any time and therefore don't have to focus on quality. The company reduces the burden of overspending since there is no duplication of work. Training and specialization help the organizations to achieve good quality and production through the functional organizational structure (Tan et al., 2007).
Al-Thuneibat, A. A., Al-Rehaily, A. S., & Basodan, Y. A. (2015). The impact of internal control requirements on the profitability of Saudi shareholding companies. International Journal of Commerce and Management, 25(2), 196-217.
Malik, S. Z. (2014). Strategic Change and Organizational Reforms: Case of a Pakistani University. Journal of Research & Reflections in Education (JRRE), 8(1).
Momani, N. M., & Fadil, A. S. (2013). Risk management practices in the Saudi business organizations: A case study of the city of Jeddah. Journal of Business and Retail Management Research, 7(2).
Saudi Pharmaceuticals company, SPC. (2017).Building front lines against cancer and life threatening diseases. Retrieved from http://www.sudairpharma.com/web/index.html
Spector, B. (2013). Implementing Organizational Change: Theory and practice (3rd ed.). Upper Saddle River, NJ: Pearson. ISBN-13: 9780132729840
Tan, W. L., Menkhoff, T., & Chay, Y. W. (2007). The effects of entrepreneurial growth orientation on organizational change and firm growth. Small Enterprise Research, 15(2), 88-99.
Welsh, D. T., & Ordonez, L. D. (2014). Conscience without cognition: The effects of subconscious priming on ethical behaviour. Academy of Management Journal, 57(3), 723-742.
Whitmarsh, L., Lorenzoni, I., & O'Neill, S. (Eds.). (2012). Engaging the public with climate change: Behaviour change and communication. Routledge.
Fan, J. P., Wong, T. J., & Zhang, T. (2013). Institutions and organizational structure: The case of state-owned corporate pyramids. The Journal of Law, Economics, and Organization, 29(6), 1217-1252.
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