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Organisation of human resources

Functional organisation

In many businesses jobs are grouped together into functions. Sometimes these are the same as the departmental structure of the organisation. So, the firm will have a marketing department (function) and finance department (function) etc. This style of organisational structure allows the business to have clearly defined channels of communication and a recognised hierarchy. Roles and responsibilities are known and all employees know who is in charge of what. The decision-making can be focused on a few 'at the top' and is therefore known as centralised.

This 'functional organisation' is a form of organisation adopted by many firms and it has a number of advantages:

  • Accountability - each department will have managers who are responsible for the work of that department.
  • Clarity -it is clear to all employees who is responsible for each area of activity.
  • Specialisation - each department has specialist personnel, who help raise the level of productivity of the firm.

functions.pngHowever, there are disadvantages to this form of organisation:

  • Bureaucracy / lack of flexibility - this form of organisation can be very inflexible as departments have set rules and procedures and may do things the 'department way'.
  • Communication problems - departments may not communicate well with each other, particularly if the firm's communication is essentially top-down in form.
  • Inertia - as with lack of flexibility, departments may be resistant to change, preferring to continue with their existing methods.

Other forms of organisational structure

Other possibilities for the organisation of firms are:

  • Organisation by product - large firms will often have an extensive product range and so they may choose to organise themselves by product or type of product. Each product may even be organised as a separate company all owned by the main holding company. Within each product, the firm may still be organised by function.
  • Organisation by area - firms may decide to organise themselves by region or geographical area. This may help them to be more responsive to local needs and improve their communication within the region.
  • Organisation by customer - where firms have large customers, they may (as with organisation by product) choose to organise themselves by customer. They may still have certain elements of functional organisation (accounts department etc.), but organise themselves as project teams for each customer.

Line and staff organisation

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Line and staff

Line departments are involved in making decisions regarding the operation of the organisation, while staff areas provide specialised support. The line-and-staff organisational structure provides specialised, functional assistance to all managers, to ensure adequate checks and balances, and to maintain accountability for results.

A line and staff organisation structure is a combination of functionally based line managers with specialist support staff who have an advisory capacity.

An example of a functional line manager would be the sales manager. Without sales the firm cannot operate, as products and services would not be sold. A specialist staff function is human relations management. Individual line managers could carry out the function of recruitment, but the HRM department has specialists in recruitment and so the function of recruitment may be delegated completely or advice requested as necessary. Support staff form the foundations of the organisation, but do not have a direct role in the production or sale of the product or service

There is potential for conflict between line managers and staff advisors, who may have different interests. The line manager will be focused on the needs of the department or function, whereas the staff advisor may have a wider organisational viewpoint. It is common for the background of these two sets of personnel to be different. Traditional line managers may have worked their way up through the organisation and possess considerable experience and detailed practical knowledge. Staff specialists may be younger and less experienced, having achieved their position through degrees and other professional academic qualifications.