This type of organizational structure is based upon the premise that each individual in the organization executive and employee should as few distinct duties as possible. The principle of specialization is used to the full extent. Duty assignments and delegations of authority are made according to function.
No matter where a particular function appears in the organization, it is in jurisdiction of the same executive. In functional sales department sales people receive instructions from several executives but on different aspect of their work. Provisions for coordinating the functional executives are made only at the top of the structure; executives at lower level do not have coordinating responsibilities. In contrast to line and staff organization, all specialists in functional organization have line authority of the sort. Instructions and even policies can be put into effect with or without prior approval of the top level coordinating executives.
A functional sales organization structure is shown in figure 10.3.The coordinating executive is the director of sales administration all executives in the next level are specialists. As indicated sales personnel receive instructions from six different executives
Advantages of Functional Sales Organization
- Specialized activities are assigned to experts whose guidance should help in increasing the effectiveness of sales force.
Weakness
- The sheer size of sales force in many large firms makes the highly centralized sales operation of a functional organization impractical. This limitation is traced to the requirement in functional model for lone official to coordinate the specialists.
- The practicality of functional organization for the sales department is open to question. Small and medium sized firms do not find it feasible or financially possible to utilize the high degree of division of labour.