When the size of the organisation is large, with diversified activities and operations, requiring high degree of specialisation, which type of organisation structure will be most suitable?

Functional Structure

The correct answer is option 3- Functional Structure.

Grouping of jobs of similar nature under functional and organising these major functions as separate departments creates a functional structure. All departments report to a coordinating head. For example, in a manufacturing concern division of work into key functions will include production, purchase, marketing, accounts and personnel. These departments may be further divided into sections. Thus, a functional structure is an organisational design that groups similar or related jobs together. Thus, 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. Functional structure is most suitable when the size of the organisation is large, has a diversified activities and operations require a high degree of specialisation.