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Work- and Task-Focused Design: Functional Structure and Team

From Chapter 45 Management: Task, Responsibilities, Practices (by Peter Drucker)

The Three Ways of Organizing Work and Task — The Functional Structure — Its Strengths and Its Limitations — Can the Weaknesses Be Offset? Vail "Bogeys" — GE's "Functional Objectives" — Their limited Scope — Where Functionalism Works — The Team — Examples: The Hospital; the Plastic-Mold Company — Their Lessons — Requirements for Effective Teams: Continuing Mission; Clear Objective; Leadership; Group Responsibility — The Team Leader's First Job: Clarity — The Limitations of the Team Principle — How Large Can a Team Be? — The Scope of Team Organization — Top-Management Teams — Innovating Teams — Team Design and Functional Structure — Team Design and Mass-Production Work — Team Design and Knowledge Organization

All work, physical as well as mental, can be organized in three ways.

It can be organized by stages in the process. In building a house we first build the foundation, then the frame and the roof, and finally the interior.

It can be organized so that the work moves where the skills and the tools are for each of the steps required. The traditional metalworking unique product plant has batteries of reamers and lathes in one aisle, stamping machines in another, heat treating equipment in a third, with the pieces of metal moving from one group of tools and their skilled operators to another.

Or, to give another example, the student at the university—the "raw material" of the educational process—moves from classroom to classroom, from professor to professor, from course to course. Each professor in each course teaches only the subject of his specialized skill, with the student emerging at the end as an "educated man," or at least as a diploma holder.

Finally, we can join together in a team workers with different skills and different tools and move them to the work, which itself is stationary. A movie-making crew the director, the actors, the electricians, the sound engineers—"goes on location." Each does highly specialized work; but they work as a team.

"Functional organization" is commonly described as organizing work into "related bundles of skill." Actually it uses both the stage organization and the skill organization of work. Such traditional functions as manufacturing or marketing comprise a very wide variety of unrelated skills, viz., the machinist's skill and the production planner's skill in manufacturing, and the salesman's skill and the market researcher's skill in marketing. But manufacturing and marketing are distinct stages in the process. Other functions, such as accounting and personnel, are, however, organized by skills. But in any functional organization the work is moved to the stage or the skill. The work moves, while the position of the worker is fixed.

In the team structure, however, work and task are, so to speak, "fixed." Workers with different skills and different tools are brought together in a team or a task force and assigned to a piece of work or a job whether this is a research project or the architectural design of a new office building.

Both functional structures and team are very old designs. The Irrigation Cities of Mesopotamia and the Egyptian pyramid builder organized work functionally. And the organized and permanent team of the "hunting band" goes back even further, to the last Ice Age.

But as conscious, deliberate, designed structures, both are new. Functional organization was defined and designed by Henri Fayol in the early years of this century. The team is only now being recognized as a design principle.

Work and task have to be structured and organized. Any organization has to apply one or both of the design principles for work and task, i.e., functional structure and team. Many, as will be discussed later in this chapter, should apply both. And all organizations need to understand both.

The Functional Structure

Functional design has the great advantage of clarity. Everybody has a "home." Everybody understands his own task. It is an organization of high stability.

But the price for clarity and stability is that it is difficult for anyone, up to and including the top functional people, to understand the task of the whole and to relate their own work to it. While stable, the structure is rigid and resists adaptation. It does not prepare people for tomorrow, does not train and test them, and on the whole, tends to confirm them in the desire to do a little better what they already do, rather than to be receptive to new ideas and new ways of doing things.

The strengths and the limitations of the functional principle give it peculiar characteristics with respect to the economy specification. At its best, functional organization works with high economy. Very few people at the top need to spend much time on keeping the organization running, that is, on "organizing," "communications," "coordination," "conciliation," and so on. The rest can do their work. But at its fairly common worst, functional organization is grossly uneconomical. As soon as it approaches even a modest degree of size or complexity, "friction" builds up. It rapidly becomes an organization of misunderstandings, feuds, empires and Berlin Wall building. It soon requires elaborate, expensive, and clumsy management crutches—coordinators committees, meetings, troubleshooters, special dispatchers—which waste everybody's time without, as a rule, solving much. And this degenerative tendency prevails not only with respect to relations between different "functions." The large functional unit with its subdivisions and subfunctions is equally prone to rapid internal inefficiency and equally requires more and more managerial effort devoted to its own internal running.

Another way of saying the same thing is that functional design, where it applies, makes the least psychological demands on the people. They are highly secure both in their work and in their relationships. When it, however, is being used beyond fairly narrow limits of size and complexity it creates emotional tensions, hostilities, and insecurities. People will then tend to see themselves and their functions belittled, besieged, attacked. They will come to see it as their first job to defend their function, to protect it against marauders in other functions, to make sure "it doesn't get pushed around." "Nobody here realizes that the company is being kept alive by us engineers" (or "us salesmen" or "us accountants") is a common complaint. And besting the "wicked enemies" within will become sweeter victory than making the business prosper. Precisely because functional design demands from functional people little responsibility for the performance and success of the whole, a poorly working—or overextended—functional structure is likely to make people both insecure and parochial.

The basic strength as well as the basic weakness of functional organization is its effort-focus. Every functional manager considers his function the most important one. This results in high emphasis on craftsmanship and professional standards. But it also makes people in the functional unit prone to subordinate the welfare of the other functions, if not of the entire business, to the interests of their unit. There is no real remedy against this tendency in the functional organization. The lust for aggrandizement on the part of each function is the price paid for the laudable desire of each manager to do a good job.

Communications are fairly good in the small functional organization. They break down once the functional organization reaches even moderate size. Even within the individual functional unit, e.g., the marketing department, communications weaken if the unit becomes large or complex. People are then increasingly specialists and interested primarily in their own narrow specialty.

The most extreme example is the largest and most highly specialized functional organization around: the large university. But a large manufacturing department or the commercial-loan department of a big bank also resembles that well-known description of a large university faculty as "a collection of anarchists held together by a common parking lot."

As a decision-making structure functional organization—even if fairly small—works poorly. For decisions cannot, as a rule, be made except at the highest level of a functional organization. No one except the man at the top sees the entire business. As a result, decisions are also easily misunderstood by the organization and are poorly implemented. They are seen as "who is right" rather than as "what is right." And because a functional organization has high stability but low adaptability, the challenge to do something truly new and truly different is likely to be suppressed rather than brought out in the open and faced up to.

Functional organization also does poorly in developing, preparing, and testing men. Functional organization of necessity puts the major emphasis on a man's acquiring the knowledge and competence that pertain to it. Yet the functional specialist may become narrow in his vision, his skills, and his loyalties. In a functional organization there is a built-in emphasis on not showing "unbecoming curiosity" about the work of other functions or specialties, that is, on narrow departmentalization.

Moreover, functional organization tends to make a man unfit for management precisely because most of the emphasis is on functional skill rather than on results and performance. Indeed the more highly skilled functionally an organizational unit is, the less will it value management, the less well will it prepare a man to be a manager.

French businesses tend to be most rigidly functional in their structures. It is therefore perfectly logical that top management in large French companies does not, as a rule, come out of the business itself and tends to consider that a career in the company unfits a man for a top-management position (see Chapter 35). But the fault is not in the men; it is in using functional organization far beyond the size and complexity for which it is appropriate.

Can the Weaknesses Be Offset?

These limitations and weaknesses of functional organization were apparent from the very first. A good deal of thought has therefore been given to … (read more in chapter 45 of Management: Tasks, Responsibilities, Practices)

Also see Another reorganization


“The greatest danger in times of turbulence is not turbulence; it is to act with yesterday’s logic”. — Peter Drucker

The shift from manual workers who do as they are being told — either by the task or by the boss — to knowledge workers who have to manage themselves ↓ profoundly challenges social structure

Managing Oneself is a REVOLUTION in human affairs.” … “It also requires an almost 180-degree change in the knowledge workers’ thoughts and actions from what most of us—even of the younger generation—still take for granted as the way to think and the way to act.” …

… “Managing Oneself is based on the very opposite realities: Workers are likely to outlive organizations (and therefore, employers can’t be depended on for designing your life), and the knowledge worker has mobility.” ← in a context




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