Which of the following is not an advantage of the functional structur…

The correct answer is Option (3) → It promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision making.

In a functional structure, the work is grouped by function, such as production, marketing and finance, each under its own department head.

• Option (1) It promotes control and coordination within a department because of similarity in the tasks being performed. — An advantage of the functional structure (Incorrect). People in one department do the same kind of work, so their efforts are easy to control and bring together.

• Option (2) It leads to minimal duplication of effort which results in economies of scale and reduction in cost. — An advantage of the functional structure (Incorrect). Each function is done in one place only, so the same work is not repeated in several departments.

• Option (3) It promotes flexibility and initiative because each division functions as an autonomous unit which leads to faster decision making. — Not an advantage of the functional structure (Correct). This is an advantage of the divisional structure, where each product division runs as a self-contained unit and takes its own decisions. The words “division” and “autonomous unit” belong to it. A functional structure is in fact less flexible.

• Option (4) It makes training of employees easier as the focus is only on a limited range of skills. — An advantage of the functional structure (Incorrect). Each department needs only its own set of skills, so training can be focused.