1. Hindrance in Organisational Objectives:
Under functional structure, more emphasis is given on achieving of departmental objectives rather than the overall organisational objectives. Such a practice leads to functional empires and places hindrance in the interaction between two or more departments. Hence, organisational objectives may not get achieved.
2. Ineffective Coordination:
Establishing coordination in functionally differentiated departments becomes very difficult.
3. Conflicts:
Sometimes, interests of two or more departments may not be compatible. In such a situation, it leads to conflicts among different departments.
4. Inflexibility:
It leads to inflexibility in the organisation since people with same skills and knowledge develop a narrow outlook and face difficulty in understanding and appreciating other jobs.