Which of the following are true of the functional structure?
A. It leads to occupational organisations
B. It leads to minimal duplication of efforts which results in economies of scale
C. Product specialisation helps in development of varied skills in divisional head
D. Easy training of employees as focus is on limited range of skills.
E. New divisions can be added without interrupting the existing operations
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → A, B, D Only
A. It leads to occupational organisations — True of functional structure (Correct). It leads to occupational specialisation, as emphasis is placed on specific functions.
B. It leads to minimal duplication of efforts which results in economies of scale — True of functional structure (Correct). Minimal duplication of effort gives economies of scale and lowers cost.
C. Product specialisation helps in development of varied skills in divisional head — Not true of functional structure (Incorrect). This is an advantage of the divisional structure.
D. Easy training of employees as focus is on limited range of skills. — True of functional structure (Correct). The focus is only on a limited range of skills, so training is easier.
E. New divisions can be added without interrupting the existing operations — Not true of functional structure (Incorrect). This is an advantage of the divisional structure.
NCERT (2026-27 Edition): “Functional structure … (a) 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.” “(d) It leads to minimal duplication of effort which results in economies of scale and this lowers cost.” “(e) It makes training of employees easier as the focus is only on a limited range of skills.” “Divisional Structure … (a) Product specialisation helps in the development of varied skills in a divisional head and this prepares” “(d) It facilitates expansion and growth as new divisions can be added without interrupting the existing operations by merely adding another divisional head and staff for the new product line.” |