Question

Distinguish between Functional and Divisional organisational structure on the basis of the following :

(i) Meaning
(ii) Communication
(iii) Decision - making authority
(iv) Use of resources

Answer 1

$\begin{array}{ccc}\text{Basis}& \text{Functional Structure}& \text{Divisional Structure}\\ \text{Meaning}& \text{This structure focuses on specialisation}& \text{This process focuses on specific}\\ & \text{and standardisation by grouping employee}& \text{geographic location, product or}\\ & \text{positions into departments.}& \text{customer segment where in powers}\\ & & \text{of decision - making and accountability}\\ & & \text{are transferred to employees or business units.}\\ \text{Communication}& \text{Easier to manage people.}& \text{Conflicts and rivalries can occur between divisions.}\\ \text{Decision-making authority}& \text{Top management takes decisions}& \text{Organisation's divisions take decisions on profits, losses,}\\ & \text{regarding profits, losses, and revenues.}& \text{and revenues.}\\ \text{Use of resources}& \text{Resources are optimally utilised. There}& \text{Resources are over-utilised}\\ & \text{is no duplication or overlapping of work.}& \text{leading to duplication and}\\ & & \text{overlapping of work.}\end{array}$