Functional Sales Organization: Definition, Pros, and Cons

What is a Functional Sales Organization?

Some sales departments use functional sales organizations. In fact, this type of functional sales organization is developed from the management theory of Frederick W. Taylor. In this organization, each individual, executive, and salesperson are given distinct duties.

Functional sales organization structure follows the principle of specialization to the fullest extent. Duty assignments and delegation of authority are made in accordance with the functions.

Here, salespeople receive instructions from several executives but on different aspects of their work. The top-level executive (Director of Sales Administration) coordinates functional activities. Instructions and policies are put into effect with or without prior approval of the top-level executives.

Pros and Cons of Functional Sales Organization Structure

Pros/Advantages/Positive Aspects

• It improves the performance of both specialists and salespersons because specialized activities are assigned to experts and their guidance helps in increasing salespersons’ effectiveness.
• It is not necessary every time to take permission of the director while exercising their authority and discharging their duties because the decentralization principle is followed in the functional organization structure.
• Salespeople feel that the sales specialists make them easy-going while performing because the latter treat them cordially with necessary guides and create a friendly environment.
• It is suitable for large companies with stable operations and with opportunities for considerable division of labor.

Cons/Disadvantages/Negative Aspects

• The director of sales administration, sometimes, fails to coordinate the functional specialists. As a result, conflict may arise between therm.
• Salespersons are, sometimes, confused as to whose instruction to follow because each salesperson is instructed by each specialist.
• The model of functional sales organization does not work well in large firms which need more administrative levels when: the marketing area is extensive, the product line is wide, and a large number of selling personnel are required.
• Even small and medium-size companies cannot utilize the high degree of division of labor concept due to financial problems.