Advantages of functional organization structure

A functional organization has a traditional organizational structure in which each functional department, such as engineering, marketing, and sales, is a separate entity

Depending on the size of the organization, there could be a hierarchy within these manager and other designations like director, managing director etc could be available who in turn report up to the CEO or the owner of the company.

The scope of a project in a functional organization is usually limited to the boundaries of the functional department. Therefore, each department runs its projects largely independent of other departments. When a communication needs to occur between two departments, it is carried through the hierarchy of functional managers.

For Ex: If someone from the Sales team needs to communicate with someone in the Marketing team, he would route it through the Sales Manager who in turn will route the information through the Marketing Manager.

All the managerial power or authority in simple terms, in a functional organization is vested in the functional managers, who control the team members' performance evaluations, salaries, bonuses, hiring, and firing.