Read the following passage and answer the following questions.

Nimu Ltd. manufactures toys for children below 12 years. The company implements the plan by clarifying jobs and working relationships for achieving the goal of production of 1000000 toys per month. To achieve this goal, the company divided its activities into purchase, marketing, and finance. Under the marketing department, sales and advertisement activities are grouped. The company makes a framework within which managerial and operating tasks are performed. The manager of the company extends his area of operations as without it, his activities would be restricted to only what he can do.

Which of the following option shows the functional structure?

To achieve this goal, the company divided its activities into purchase, marketing, and finance

The correct answer is option 2- To achieve this goal, the company divided its activities into purchase, marketing, and finance.

The company divided its activities into purchase, marketing, and finance. Under the marketing department, sales and advertisement activities are grouped. These departments are created under the 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.