In any functional organization all activities of an organization are divided into various functions such as production, marketing, finance etc. Each functional area is headed by a specialist who directs the activities of that area for the entire organization. Every employee therefore is required to report to various functional heads.
The functional heads:
The functional head has line authority over subordinates in his own functional area. Additionally, he has functional authority over activities in other functional areas. The term functional authority thus is a limited form of line authority given to functional experts in an area where certain specialized activities are carried out under the normal supervision of managers belonging to other departments.
Functional organization has the great advantage of clarity. Every body has a home. It provides economy of scale within functions. It reduces duplication and waste. Functional heads can specialize and focus energies on a narrow area as they gain experience, expertise and competence over a period of time. The effort focus, however puts managers in a race. They tend to fight for power, resources and benefits . Every one tries to glorify his own field at the cost of others. Overlapping of authority and divided responsibility further complicates the scenario.
Personnel Department in Line and Staff Organization:
The line and staff structure combines the benefits of both line organization and functional organization. Staff positions are created to assist line managers. Thus the personnel department offers help and advice on personnel issues to all departments without violating the unity of command principles.
Personnel Department in a Divsionalised Organizational Structure
The role of a personnel managers attached to the divisional office / branch office or factory of a decentralized organization is particularly difficult one. The personnel manager a division / branch level is responsible to the local divisional / branch manager in a line sense and subordinate to the Manager- Personal at head office in a staff or functional sense. Personnel manager at divisional / branch level has to help the divisional / branch manager in developing personnel programs and in the management of personnel of the division / branch concerned. The deputy manager personnel at the divisional level may contact the manager personnel at the head office to gain acceptance of the personnel programs. In case of rift between divisional manager and deputy manager, they may report their difficulties to their common superior who in turn consults higher management for correct decision. Similarly the personnel officer at branch level may contact the deputy divisional manager personnel at divisional level to gain acceptance of the personnel programs and to get clarifications about personnel issues. In case of the rift between the branch manager and branch personnel officer, they may report their issues to their superior at divisional level. The branch personnel officer and branch manager may get the assistance from the personnel manager at the head office, in solving the problems of crucial and strategic nature as also those which cannot be solved at the branch / divisional level.
Personal Department in a Matrix Organizational Structure:
In a matrix organizational structure employees have two superiors in that they are under dual authority. One chain of command is functional and the other is a project team. Hence, matrix structure is referred to as a multi-command system ( both vertical and horizontal dimensions ). Thus, the teams of employees which comprise the personnel department have two superiors, i.e. Personnel manager (vertical dimensions) and Project manager (horizontal dimensions). Both dimensions of structure are permanent and balanced, with power held equally by both the functional head and a project manager.
Excerpts from HRM by VSP