What is functional structure and divisional structure?

Functional Structure is one in which the reporting relationships of the organization are bifurcated according to their functional area. An organizational structure wherein the organizational functions are classified into divisions as per product or service lines, a market is called Divisional Structure.

Why divisional structure is preferable to functional structure?

The cost involved in functional organisation structure is comparatively less as the functions are not repeated. Unlike, the divisional organisational structure wherein there is the repetition of resources, and so it is costly. The functional structure is best suited to those organisation which is small and simple.

What is divisional organization structure?

The divisional structure is a type of organizational structure that groups each organizational function into a division. Each division contains all the necessary resources and functions within it to support that product line or geography (for example, its own finance, IT, and marketing departments).

What are the four types of divisional structures?

4. Divisional org structure

• Market-based divisional org structure. Divisions are separated by market, industry, or customer type.
• Product-based divisional org structure. Divisions are separated by product line.
• Geographic divisional org structure.

What is functional structure example?

A functional structure is the one that divides the major functions of a firm into different groups, for example, information technology (IT) department, finance department, marketing department and production department. Airtel is a leading telecommunication company in India.

What are the characteristics of divisional structure?

A divisional organizational structure consists of parallel divisions. These division might be responsible for a product or service, a geographical location, or a customer group. Each unit is equipped with its own resources to function independently.

What is the function of divisional structure?

The divisional organizational structure organizes the activities of a business around geographical, market, or product and service groups. Thus, a company organized on divisional lines could have operating groups for the United States or Europe, or for commercial customers, or for the green widget product line.

Who uses functional structure?

A functional organizational structure is a structure used to organize workers. They are grouped based on their specific skills and knowledge. It vertically structures each department with roles from the president to finance and sales departments, to customer service, to employees assigned to one product or service.

What is an example of divisional structure?

Divisional. In a divisional structure, people are grouped together based on the product or service they provide, not the work they do. For example, a large corporation such as General Electric has divisions for electronics, transportation, and aviation, each with its own team of accountants, marketers, etc.

What is the functional structure?

A functional structure is a business structure that is based on the function of each position within the business and the knowledge and skills of the team members that perform each role. Most businesses have an organisational structure for their business, but is it functional? Chances are that it isn’t.

What are the main features of functional structure?

Functional Organisational Structure – Features, Advantages and Disadvantages

• Following are the features of functional organisation:
• Functional organisation has the following advantages:
• Specialisation:
• Increase in Efficiency:
• Scope for Growth:
• Flexibility:
• Relief to Top Executives:
• Economy of Operations:

Is functional structure the same thing as divisional structure?

Key Difference – Functional vs Divisional Structure. The key difference between functional and divisional structure is that functional structure is an organizational structure in which the organization is divided into smaller groups based on specialized functional areas such as production, marketing and sales whereas divisional structure is a type of organizational structure where operations are grouped based on divisions or separate product categories.

What are the advantages of divisional organizational structure?

Accountability. The divisional organizational structure allows each division of a firm to be accounted for in isolation.

What are the three basic organizational structures?

Three forms of organizations describe the organizational structures that are used by most companies today: functional, departmental and matrix.

What is an example of a functional organization?

Example of functional organization. A functional organizational structure is perfect for medium and small business houses as well as or companies that have either one or a few product lines. For example, a small business entity AB Company deals in the manufacturing of diapers and has nearly one hundred employees.