Functional chimneys problem occurs when people in different functions fail to communicate with one another.
• Functional structures of organizing gives rise to different groups in an organization which are segregated based on the function that they perform.
• These happen at times when these functional groups don't perform for the organization goals, but do so for smaller functional goals.
• It happens when there is a lack of coordination and communication amongst the groups, thus giving rise to functional chimneys or functional silos problem.
Still then functional structures are necessary because the functional experts are good at solving technical problems, and function-specific training promotes skill development. These skills help the members to have function specific career development. Thus, in spite of having the functional chimneys problem, it is utility to use functional structures.