Question

Write any two differences between Functional and Divisional structure of management.

Hint:

In a functional structure, specialization is high, while in a divisional structure, flexibility and adaptability are enhanced due to division-based autonomy.

Answer 1

Step 1: Understanding Functional Structure.
In a functional structure, the organization is divided into departments based on specialized functions like marketing, finance, HR, etc. Each department has its own head responsible for the management of that specific function.

Step 2: Understanding Divisional Structure.
In a divisional structure, the organization is divided into divisions based on products, services, or geographical locations. Each division operates as a separate unit with its own resources and goals.

Step 3: Differences between Functional and Divisional Structures.
1. Basis of Division: In a functional structure, division is based on specialized functions like finance, marketing, etc. In a divisional structure, division is based on products, services, or regions.
2. Responsibility: In a functional structure, functional heads are responsible for their specific functions, while in a divisional structure, division heads have more autonomy and responsibility over their divisions.

Step 4: Conclusion.
Both structures have their own advantages and are chosen based on the organization's goals and size.