Advantages and Disadvantages of Functional Structure
Discuss About The Functional Network Organization Long Axis.
An organization is arranged following a melange of structures. These structures represent how an organization will perform and operate. Among a variety of structures, the most common organizational structure is the functional structure[1]. According to this structure, the organization is divided into small groups based on field of specialty.
Advantages and disadvantages of implementing functional structure are as follows. The first and most important advantage of functional organizations are that the employees are categorized according to their specialization[2]. This ensures the maintenance of the departmental competency level. Each group deals with the affairs regarding their own specialization. This increases productivity as well as customer satisfaction. Another benefit of functional structure is operational speed. This advantage can be explained through an example, suppose the organization faces a problem related to IT. The amount of time IT experts would take to resolve the problem will be much less than an employee who is not an IT expert[3]. The disadvantages include the lack of coordination[4]. Communication acts as a dominant feature in all organizations but isolated groups may lead to lack of sufficient communication. This may lead to underperforming employees. Another disadvantage is the occurrence of territorial disputes. The division of groups decreases cooperation among them, which increases the probability of territorial disputes.
A functional information system is the system that yields information regarding a definite breed of activity or similar group of activities[5]. It also provides the information in a summarized form for the management control of those activities.
Information system is important to an organization in various ways, the first one being operations management. The management of a company’s operation depends on the information possessed by the company[6]. Information system can provide recent and complete information to the organization. This allows a company to operate efficiently. Help of information system can be granted in order to derive a cost advantage over its competitors. It can also be used for providing better customer service. One of the most important uses of information system is decision making. The company information system can help in taking better decisions. A best decision can be taken when all the information is updated. In case of any difficulty in choosing among the alternatives information system can be used to run different scenarios and give an estimated result. This helps in taking better decisions.
Functional Information System and its Importance
Drawbacks of functional information system include lack of job security. Implementation of functional information system consumes less time in any task weather it is paper work or financial transactions[7]. Most of the work is done automatically. With the advancement of technology, computers now carry out the works that needed work force with much more efficiency. One of the most dangerous drawbacks of information system is security issues. Cyber criminals like hackers may get access to the information of a company by any means. These data include bank records, vendor information and personal information[8]. Hackers may sell the data to rival companies or make use of it to spoil the company’s image.
Difference between enterprise information system and functional system are as follows. Enterprise information system belongs to enterprise class but functional system dos belong to such breed[9]. Enterprise information system is not only capable of storing data but also support large organizations. Functional system is only responsible for storing data and updating them. Enterprise information system makes sure that the information is shared across various levels including management hierarchies but information system secures a data and assures that any unauthorized person does not access it.
Enterprise information system is valuable to an organization in many ways. Enterprise information system assures that everyone is using similar kind of information and processes in their business[10]. This helps in creating a uniform organization culture. It also improves quality and efficiency of production, distribution and customer service. It boosts the distribution by integrating the organization’s internal business processes. These processes include finance, sales, custom logistics and production.
Functional view and process view of an organization differ in various ways they are, a process includes multiple numbers of functions and a functional approach preludes many processes[11]. The process revolves around a product family but a function revolves around the work it performs throughout the product families.
The importance of processes in an organization includes efficiency. The process included in running an organization decides the efficiency of an origination. The process of recruitment should be very effective. Possessing the right people, motivated enough and performing well is the basic requirement of a company. The process of providing employees with the required tools so that they can perform efficiently is also an important factor.
Three-way match is used for various purposes. Firstly, it is used for preventing loss due to carelessness or fraud. Three way matching makes sure that all the sections of three documents are well examined and all the information is correct[12]. In addition to that, it also prevents non-authorized purchases of any product. Three-way matching is also used for preventing duplication. Sometimes an organization adds extra costs because a particular item has been paid for more than once. The three-way matching process eliminates these kinds of mistakes by checking the date on which the product has been ordered and the number of products ordered.
Enterprise Information System and its Value to an Organization
Three-way match consists of three documents that are used to manage payments. The three documents are purchase orders, packing slips and invoices. Purchase order includes the confirmation of a particular order. A document sends to a vendor by a purchaser in order to authorize a purchase[13]. This document includes the name of company that is purchasing the product or service, description as well as the quantity of goods, date, mailing address, price, invoice address, payment information and an order number. Packing slip is a proof of payment along with delivery[14]. Along with the goods, an order receipt is delivered to the purchaser. An invoice is a document that requests payments for on order that has been placed[15]. They include the information similar to the purchase order, the invoice number, payment schedule, discounts provided for early payments, contact information of the vendor and the total amount to be paid to the vendor.
The difference between the bill of material and product routing is that a bill of material is a list of constituents needed in manufacturing a product. On the other hand, a router controls the process of manufacturing. It guides the manufacturing process through every step and allows the operator to sign out when the process is completed[16].
Key problems associated with manual based business process are as follows. Traditional system of filing required corporal access. In case any document is misfiled, it takes lot of time to look for it. It is very time consuming when it comes to looking for an appropriate document. It might be on the employee’s desk among a bunch of files and he might not know it. Second problem faced by organizations is losing documents. The best of manual or paper-based filing systems are brought to an end because of data lost. It is difficult to figure out whether the document was misplaced or it has been thrown away unintentionally. This lost information is impossible to get back. Whereas a digital document is easy to store as well as it is never lost.
Step to eliminate or reduce the impact of these problems include getting data that is more reliable. An automatic AP system can be introduced in order to take care of the data entry that is being done on regular basis. Electronic invoices can be used; they enter the system easily in order to gather data. They avoid errors along with consuming less time. A good quality software for AP automation can be used because they store the invoice information permanently and make it easy to access too. The data is stored in a digital format.
Functional View vs Process View of an Organization
In make-to-order, the production orders are regulated with the help of sales orders. There should be a strong link between the module of production planning and the sales order module[17]. The progress of every production orders should be tracked and informs the customers about a definite sales order. In case of make to stock, the production planning is supported by a sales forecast. The production planning should be adjustable in order to change the sales forecast.
The advantages of make-to-order approach include specialization. The biggest benefit of make-to-order strategy is specialization of every product in order to fulfill customer’s expectations. The second is no extra inventory. This approach eliminates the useless inventories from an employee’s shelf. In this approach, the employer does not need to be tensed due to unsold items. The disadvantages are low supply and the waiting time. Low supply of inventory for sell is the basic disadvantage of this approach. The customer’s order stuffs online, which do not, gave them the advantage to go n see the products in real and buy them at once. This could lessen the overall revenue of the company.
The advantages of make to stock approach is that it allows to spread the production within a given time period. It provides high efficiency of production. The disadvantage is this approach is not flexible in adapting new market circumstances.
The impact of globalization on organizations is companies had developed joint embark with partners located in abroad[18]. The multinational corporations had developed trading operations worldwide. Workers continuously chased for job opportunities.
The organizations responded in various ways, some expanded internationally. Organizations planned geographic expansions. Policy matter is also one of the responses. Businesses were engaged with governments on issues such as regulation, protectionism and trade issues as well.
A product may have several views means when an order is placed, the data is transferred to a process called procurement process. In this process, the availability of the product ordered is checked. The availability is checked in master data. After this, the vendor authorization is checked. It corrects the missing details without affecting other part of the process that has already been carried out. It also checks if the orders are made reputedly.
A view is a process of representing information in database. This is carried out by arranging the data in a particular manner and highlighting a definite number of items. Views can secure mechanism, certain number of rows, columns can be selected, and it can be edited in the order anyone wants to see it.
Three-way Match and its Purpose
Difference between an organization’s transactional and master data are as follows. A transaction data is provided after any transaction that has been carried out. Suppose a bank employee asks for someone’s account number. After providing it, the computer takes the information and an amount is withdrawn. The remaining balance after the withdrawal is the transaction details. When the bank’s database updates some information regarding user’s name, age or sex this is called master data. They come from standard list.
Raw materials (ROH), raw materials are those that are requires for manufacturing any product. Raw materials are purchased from vendors but not sold to the end-customers. Some examples are tires, wheels and tubes.
Semi-finished materials (HALB), they are produced with the help of raw materials. They are also used to produce finished goods[19].
Finished goods (FERT), these are manufactured following the production process with the help of other materials. The other materials include semi finished and raw materials. An example is a bicycle.
Trading goods (HAWA), similar to raw materials, these are also purchased from vendors. Unlike the raw materials, the trading goods are sold to end-customers. Any additional process is not carried out. An example includes helmet
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