A functional organization is the most common type of organizational structure. This is where the organization is divided into smaller groups based on its special functions such as IT, finance or marketing. This departmentalization allows greater operational efficiency because the employees have their skills and knowledge to be shared within the group. The basis of this functional organization structure is an arrangement where a worker has different managers for different areas of the organization operation. Since this type of structure has many departments, it could also have several reporting structures as well.
