Fundamentals of Management, 8th ed

F I G U R E 6 . 2

Functional (U-Form) Design for a Small Manufacturing Company

The U-form design is based on functional departmentalization. This small manufacturing firm uses

managers at the vice presidential level to coordinate activities within each functional area of the

organization. Note that each functional area is dependent on the others.

functional design

Based on the

functional

approach to

departmentalization

Chapter 6: Organization Structure and Design

1 7 7

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to pay for advertising. The WD-40 Company, which makes a popular lubricating oil, and

the McIlhenny Company, which makes tabasco sauce, are both examples of firms that

use the U-form design.

In general, this approach shares the basic advantages and disadvantages of functional

departmentalization. Thus, it allows the organization to staff all important positions with

functional experts, and it facilitates coordination and integration. On the other hand, it also

promotes a functional, rather than an organizational, focus and tends to promote centraliza-

tion. Functionally based designs are most commonly used in small organizations because an

individual CEO can easily oversee and coordinate the entire organization. As an organization

grows, the CEO finds staying on top of all functional areas increasingly difficult.