Strategy illustration Strategy theory

Organisational functions

The functions of a business are the key specialisms that it is divided up into such as marketing, accounts, production, etc. In the past many businesses were divided up on functional lines and this is still the case today in many organisations where it makes sense to create distinct departments in this way.

Many manufacturing organisations are divided up on functional lines. Clearly the most important department in a manufacturing company is often the production department. In individual factories there may be a works or factory manager with overall responsibility for organising and managing the production function.

Then there may be production managers for each of the product lines e.g. biscuits, chocolates etc. However, in addition to the production function there will be other functional specialisms such as the advertising and sales department, the finance and accounts departments, the administration department, the personnel (or human resources) department etc.

Organisations are organised on functional lines when it is felt that this is the best way of communicating and organising the organisation. Specialists are able to focus on their specialism under the supervision of specialist managers.

However, this may not be the only way of organising the organisation. For a number of projects cross-functional teams may be set up. For example, in developing a new product line it may make sense to set up a team containing specialists from marketing, advertising and sales, production, finance and accounts etc.

Once the project is completed these specialists can then go back to concentrating on their own specialist area or they may be pulled into another cross-functional project. When specialists have more than one line manager they may be organised in a matrix structure. For example, when projects are set up a production line worker may both be accountable to the production manager and to the project leader for new product development.

A matrix is a structure with more than one line of command. Individuals who make up the matrix may be accountable to two or more supervisors/managers depending on the complexity of the matrix.


Glossary »

Supporting Documents

These downloads will help to put strategy theory into context using real world examples from real businesses.

Using the marketing mix in the fashion industry
Ben Sherman logo

Learn how Ben Sherman applied strategy theory to thrive in the fashion industry by downloading our premium case study.

Re-focussing a company's culture and marketing mix
Argos logo

Find out how Argos employed strategy theory to prosper in the retail industry by downloading our premium case study.

Creating a winning marketing mix
JD Sports logo

Find out how JD Sports used strategy theory to prosper in the retail industry by downloading our premium case study.

Sponsorship as part of the marketing mix
Ford logo

Learn how Ford applied strategy theory to prosper in the automotive industry by downloading our premium case study.

Using the marketing mix to drive change
Parcelforce Worldwide logo

Learn how Parcelforce Worldwide employed strategy theory to prosper in the logistics industry by downloading our premium case study.

Newsletter

Subscribe to our newsletter for current business news including lesson plans and activity ideas.

Share this website