Question

What is functional organisation?

Hint:

Think of functional organisation as "Specialisation by Department"—everyone in the Finance department focuses only on money matters, while everyone in HR focuses only on people.

Answer 1

Step 1: Core Definition.
Functional organisation is a type of organisational structure where the entire enterprise is divided into several specialized departments based on the functions or nature of the work to be performed. Each department is headed by a functional specialist who has authority over that specific function throughout the organisation.

Step 2: Key Characteristics.
In this structure, grouping is done by common skills and activities. For example, all activities related to production are grouped in the Production Department, while activities related to sales and advertising are grouped in the Marketing Department.

Specialisation: It leads to occupational specialisation since employees perform a specific set of tasks repeatedly.
Efficiency: It promotes control and coordination within the department due to the similarity of tasks.
Clear Authority: Functional managers are experts in their fields and provide specialized guidance to their subordinates.

Step 3: Suitability.
This structure is most suitable for large organisations that produce a single line of products or offer a specific set of services. It allows the organisation to benefit from high-level operational efficiency and specialized expertise.