Distinguish between functional and divisional organisational structure on the following basis:

(a) Formation, 

(b) Managerial development, 

(c) Responsibility, 

(d) Suitability

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1 Answers

S.No. Basis Functional structure Divisional Structure
1. Formation  It is based upon functions.  It is based upon product lines and is supported by functions.
2. Managerial Development Difficult, as each function manager has to report to the chief manager. Easier autonomy as well as the chance to perform multiple functions which help in managerial development
3. Responsibility Difficult to fix on any one department. Easy to fix responsibility for performance
4. Suitability Suitable for medium sized firms having a single product or small number of related products. Suitable for large firms having multiple products with distinct characteristics.

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