Understand the advantages and disadvantages of a functional business structure

Looking for a job, particularly a corporate role, requires a keen understanding of the organisational frameworks that shape the business landscape. In this article, we delve into the essence of a functional organisational structure, exploring its advantages and disadvantages, a tangible example, and insights on adapting your CV to align seamlessly with businesses embracing this structure.

What is a functional organisational structure?

A functional organisational structure is one of the most common types of business structures. Unlike a flat organisational structure, it groups employees into different departments, often based on specialisms and expertise. It is one of two types of bureaucratic structure (the other type is divisional organisational structure).

A functional organisational structure has hierarchy levels, as different departments typically have a function lead that will direct the team. There may also be middle managers in between too. This business structure is particularly advantageous for specialists, because all team members tend to have similar knowledge and skill sets so they can work among like-minded individuals.

While startups and small companies often have a flat organisational structure, a functional structure typically works best for somewhat larger companies that require multiple people with similar skills. 

For example, an ecommerce company might have an IT department with Web Engineers, Developers, and Solution Architects, along with a marketing department with SEOs, Graphic Designers, and Copywriters, plus an HR and finance department, an operations department, and a customer service department. The members of each department will report to their Head of Department, and the Heads will report to the CEO, creating a vertical hierarchy. 

Advantages of a functional organisational structure

There are several pros of a functional organisational structure, including:

Clarity of roles and responsibilities

One of the biggest advantages of a functional organisational structure is operational clarity. If a team is set up correctly, everyone should know where to go for information and support. For example, if a Copywriter in the marketing department wants to find out if the blog CMS can support tables, they might not know the exact employee to reach out to, but they will know they need to contact the IT department for help.

Increased productivity and operational efficiency

Working in a team of professionals with similar technical skill sets helps to create an environment for speed and efficiency. Think hive mind. This creates a more productive environment. Staff can crack on with their work at pace with little supervision and, if issues occur, they can consult their knowledgeable team members to devise solutions quickly.

Skill development and shared knowledge

When a department has a lead, it ensures that specialist learning and development is structured. Each level in the team will likely have competency requirements, i.e. what soft and hard skills are required to secure a promotion and move up the hierarchy to the next level. This ensures that everyone operates in sync, reducing conflict and showing employees the key requirements for levelling up. 

In addition, staff get to collaborate and learn from one another to aid professional advancement. This is a benefit for staff and the business alike.

Minimised cost of operation

A functional organisational structure is an organised one. Organising the business into functions reduces the risk of multiple departments duplicating work. Plus, funnelling specific tasks to people with the right skill sets for the job is more effective and efficient, therefore saving the business money. 

Disadvantages of a functional organisational structure 

Unfortunately, where there are pros, there are cons. These are a few disadvantages of a functional organisation structure:

Narrow focus

Specialist teams that are focused on the specifics are a wonder for an organisation. However, the activity must be joined to the top for the business to meet its goals. If the department heads are not synced with their managers and the big picture, there's a risk of misinterpreting how the team's responsibilities contribute to the company's objectives. 

Lack of cross-functional collaboration

There are some types of tasks that are best completed by a specialist team. But very rarely do projects and campaigns require a sole skill set. Often, they require input from different functions. If the appropriate communication channels aren't set up, it can lead to siloed working conditions. Departments can also become territorial over their resources, prioritising their department's goals over the big-picture objectives.

Slow decision-making and change

Unfortunately, there can be a seemingly unhelpful amount of bureaucracy with the administration of a functional organisational structure. Implementing a recommended change to a communication channel or workflow between departments can take a long time, as all stakeholders must input before a decision is made. This can hamper progress, increase costs, and lead to missed opportunities.


Even if you're a specialist now and want to be for the next five years, it doesn't mean you can't change careers at a point that suits you. When working in a specialist team, it can be difficult to gain insight into potential sideways moves or other career opportunities in the business. Plus, this siloed nature of work can hinder the innovation potential that staff might unlock if allowed to work collaboratively with other teams.

What is an example of a functional organisational structure?

It's quite difficult to find real-life examples of functional organisational structures, as they are typically found in medium-sized businesses and therefore aren't widely documented or publicised. However, you will find elements of functional organisational structures embedded into large companies, like Facebook.

Facebook's main corporate functions use a functional organisational structure. Primary corporate function-based teams include:

  • HR

  • Investor relations

  • Global public policy

  • Marketing

  • Legal

  • Privacy

  • Operations

  • Finance

  • Technology

Within each of the teams, there will be specialists ordered in a hierarchical structure. Common cascading tiered roles could be President, Vice President, Senior Director, Director, Senior Manager, Manager, Senior Specialist, Specialist, Graduate, and Apprentice.

How to tailor your CV to a business with a functional organisational structure

When applying for a job in a medium-sized business or a large corporate, it's best to assume that it will likely have elements of a functional organisational structure. You can showcase your familiarity or competency with this type of business structure's needs by tailoring your CV. Consider these ideas:

  • Research the company's organisational structure - at the very least, the Heads of Department or leadership team.

  • Highlight your skills and experiences that directly relate to the functional areas that the company values, especially if they are referenced in the job description.

  • Provide examples of your accomplishments in similar functional roles and quantify your achievements with statistics.

  • Demonstrate how your skills and experiences align with the company's organisational structure and goals in your personal profile, achievements, or your cover letter.

  • Tailor your work experience section to feature roles, projects, and accomplishments that directly relate to the company's functional departments. Don't be afraid to cut anything irrelevant.

  • Emphasise any experience that demonstrates your ability to collaborate and work across different functional areas.

  • Briefly mention experiences where you've overcome challenges similar to those faced within a functional structure.

  • Show how you've adapted to changes in your previous roles.

  • Highlight your ability to work collaboratively within a structured environment.

The organisational structure of a company is an important consideration when choosing your next job. A job in a functional structure is very different to a job in a flat structure, even if the job title is the same. If you want to make sure that your CV and cover letter showcase the right traits for a functional company, check out our free CV review.

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