Read the following passage and answer the following questions.

Progress Ltd. which deals in stationery has been registered with a share capital of ₹1000 crores in New Delhi. The company has a manufacturing unit in Madhya Pradesh and a marketing department in Nashik. The company divided its activities into different departments. The company assigned duties and powers without creating formal authority-responsibility relationship. The entire business started working on gossip and based on personal relations.

Which organization structure is followed by the Progress Ltd?

Functional structure

The correct answer is option 1- Functional structure.

The company has a manufacturing unit in Madhya Pradesh and a marketing department in Nashik- This line shows the different departments which are made in functional structure.

Grouping of jobs of similar nature under functional and organising these major functions as separate departments creates a functional structure. A functional structure leads to occupational specialisation since emphasis is placed on specific functions. This promotes efficiency in utilisation of manpower as employees perform similar tasks within a department and are able to improve performance.