How is a functional structure different from a divisional structure?
Difference between a functional structure and a divisional structure:
Basis of difference | Functional Structure | Divisional Structure |
---|---|---|
Meaning | An organisation structure in which departments are created on the basis of different functions performed in the organisation is called functional structure. | An organisation structure in which various departments are created on the basis of products, territory or region is called a divisional structure. |
Formation | It is formed on the basis of functions performed in the organisation. | It is formed on the basis of product line territory or region. |
Specialisation | It leads to functional specialisation. | It leads to product specialisation. |
Managerial Development | It does not help in managerial development as functional managers lack autonomy. |
It helps in managerial development, as they have autonomy and knowledge of varied aspects of a product. |
Cost | It is economical as there is no duplication. | It is costlier, as there is duplication of resources. |
Responsibility | It is difficult to fix responsibility in one department. | It is easier to fix responsibility in each division. |
Suitability | It is suitable for organisations which deal with a single product category. | It is suitable for diversified or multi product firms. |
NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:
Welcome to the NCERT Solutions for Class 12 Business Studies - Chapter . This page offers a step-by-step solution to the specific question from Excercise 3 , Question 5: How is a functional structure different from a divisional structure?....
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