Read the following statements and mark the correct option carefully.

Assertion: Functional structure promotes specialisation.
Reasoning: Each department has to perform a specific function in case of functional structure.

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

The correct answer is option 1- Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

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.