Question

(a) Distinguish between ‘Functional Structure' and 'Divisional Structure' on any six bases.

Accepted Answer

(a). Difference between Functional Structure and Divisional Structure Basis Functional structure Divisional structure Formation It’s formation is based on functions. It’s formation is based on product lines supported by functions Specialisation It leads to Functional specialisation. It leads to product specialisation. Responsibility Difficult to fix responsibility. Easy to fix responsibility. Cost It is economical It is costly. Coordination Coordination is difficult for a multiproduct company Coordination is easy for a multiproduct company. Managerial Development Managerial development is difficult, as each functional manager has to report to the top management. Managerial development is easier. Autonomy as well as the chance to perform multiple functions helps in managerial development.

Marking-scheme solution

More from Organising

Basis	Functional structure	Divisional structure
Formation	It’s formation is based on functions.	It’s formation is based on product lines supported by functions
Specialisation	It leads to Functional specialisation.	It leads to product specialisation.
Responsibility	Difficult to fix responsibility.	Easy to fix responsibility.
Cost	It is economical	It is costly.
Coordination	Coordination is difficult for a multiproduct company	Coordination is easy for a multiproduct company.
Managerial Development	Managerial development is difficult, as each functional manager has to report to the top management.	Managerial development is easier. Autonomy as well as the chance to perform multiple functions helps in managerial development.