What is meant by 'functional structure' of an organization? State any two advantages.
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Functional structure of organisation means an organisational structure which is formed by grouping jobs of similar nature functions and organising such functions into separate departments such as production, marketing, finance, etc.
Advantages:
(i) Specialization: A functional structure leads to occupational specialization since emphasis is placed on specific functions.
(ii) Efficiency: It helps in increasing managerial and operational efficiency and this result in increased profit.
(iii) Minimises costs: It leads to minimum duplication of effort which results in economies of scale and thus reduces cost.
(iv) Better control and co-ordination: It promotes control and coordination within a department because of similarity in the tasks being performed.