Target Exam

CUET

Subject

Business Studies

Chapter

Organising

Question:

Which of the following statements related to functional and divisional structure are correct?

A. It is easy to fix responsibility for performance in functional structure of organisation.

B. Formation of functional structure of organisation is based on functions.

C. Divisional structure of organisation is Economical.

D. It is easy to fix responsibility for performance in divisional structure of organisation.

E. Functional structure of organisation is economical

Choose the correct answer from the options given below :

Options:

A, B and D only

A, B and E only

B, D and E only

B, C and D only

Correct Answer:

B, D and E only

Explanation:

The correct answer is option (3)- B, D and E only.

A. It is easy to fix responsibility for performance in functional structure of organisation. This is not true as in divisional structure it is easy to fix responsibility not in functional structure.

B. Formation of functional structure of organisation is based on functions. This is true.

C. Divisional structure of organisation is Economical. This is not true as divisional structure is costly because of  Duplication of resources in various departments.

D. It is easy to fix responsibility for performance in divisional structure of organisation. This is true.

E. Functional structure of organisation is economical. This is true.

 

Comparative view: Functional and Divisional Structure

Basis Functional Structure  Divisional Structure
 Formation  Formation is based on functions  Formation is based on product lines and is supported by functions
Specialisation Functional specialisation Product specialisation
Responsibility Difficult to fix on a department Easy to fix responsiblity for performance
Managerial Development Difficult, as each functional manager has to report to the top management Easier, autonomy as well as the chance to perform multiple functions helps in managerial development
Cost Functions are not duplicated hence economical Duplication of resources in various departments, hence costly
Coordination Difficult for a multi product company Easy, because all functions related to a particular product are integrated in one department