Functional management and general management represent two differing responsibility sets with an organization. Functional managers are most common in larger organizations with many moving parts, where different business functions are led by managers within those respective fields (i.e. marketing, finance, etc.). General management is more common in smaller, more versatile, environments where the general manager can actively engage in every facet of the business
Functional Management
Besides the heads of a firm's product and/or geographic units, the company's top management team typically consists of several functional heads (such as the chief financial officer, the chief operating officer, and the chief strategy officer). A functional manager is a person who has management authority over an organizational unit—such as a department—within a business, company, or other organization. Functional managers have ongoing responsibilities and are not usually directly affiliated with project teams, other than ensuring that goals and objectives are aligned with the organization's overall strategy and vision.
Functional vs. general management
This chart shows a particular organizational hierarchy employing both general and functional management. Each functional manager is in control of a particular area of expertise—e.g., operations or policy and planning—and the general manager supervises all the functional managers.
General Management
General management focuses on the entire business as a whole. General management duties and responsibilities include formulating policies, managing daily operations, and planning the use of materials and human resources. However, general managers are too diverse and broad in scope to be classified in any one functional area of management or administration such as personnel, purchasing, or administrative services.
General managers include owners and managers who head small-business establishments with duties that are primarily managerial. Most commonly, the term general manager refers to any executive who has overall responsibility for managing both the revenue and cost elements of a company's income statement. This means that a general manager usually oversees most or all of the firm's marketing and sales functions, as well as the day-to-day operations of the business. Frequently, the general manager is responsible for effective planning, delegating, coordinating, staffing, organizing, and decision making to attain profitable results for an organization.
While both general and functional management involve similar skills (interpersonal skills, communication, multitasking, etc.), the critical difference is that a functional manager often "zooms in" to one particular aspect of a broader operational paradigm. The general manager must be more of a jack-of-all-trades, understanding enough about various different gears in the machine to ensure it is running properly.
McDonald's offers an example of ways to understand both types of management. McDonald's has functional managers at the corporate level who discuss advertising strategies, assess financials, discuss expansion, and so forth. Meanwhile, general managers run individual stores, focusing on the quality of service, operational efficiency, local tastes, etc. at their store.