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Home Questions Z6XB9T6E7D
Target Exam

CUET

Subject

Business Studies

Chapter

Organising

Question:

Which of the following is true in the context of organising function of management?

Options:

Functional structure is based on functions

Divisional structure is based on product line and is supported by functions

Both 1 and 2

None of the above

Correct Answer:

Both 1 and 2

Explanation:

The correct answer is option 3- Both 1 and 2.

A functional structure groups employees based on specializations, like having all accountants in the accounting or revenue department. A divisional structure groups them across product or service lines, like having a marketing department for each individual product.

Comparative view: Functional and Divisional Structure

S No

Basis

Functional Structure                               

Divisional Structure

1

Formation

Formation is based on functions

Formation is based on product lines and is supported by functions.

2

Specialisation

Functional specialisation.

Product specialisation.

3

Responsibility

Difficult to fix on a department.

Easy to fix responsiblity for performance

4

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

5

Cost

Functions are not duplicated hence economical.

Duplication of resources in various departments, hence costly.

6

Coordination

Difficult for a multi-product company.

Easy, because all functions related to a particular product are integrated in one department.

 

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