Distinguish between functional structure and divisional structure.

Question

Difference between Functional Structure and Divisional StructureBasisFunctional StructureDivisional StructureBasis of Fo...

Accepted Answer

Difference between Functional Structure and Divisional StructureBasisFunctional StructureDivisional StructureBasis of Fo...

Basis	Functional Structure	Divisional Structure
Basis of Formation	This structure is formed on the basis of function.	This structure is formed on the basis of production.
Accountability and responsibility	Difficult to make accountable as departments are interdependent.	Easy to fix the accountability as departments work independently.
Economy	It is economical.	It is not very economical because all the resources are required in different departments.
Development of Managers	Less chance as manager becomes specialised in one function only.	More chances as managers perform multifunction.
Specialisation	This type of structure brings functional specialisation.	It brings product specialisation.
Suitability	This type of organisation is suitable when only one product is manufactured.	This type of organisation is suitable when more than one product is manufactured.