Functional structure: Grouping the jobs based on similar nature and organizing them different departments is known as functional structure. The functional structure enforces a clear chain of command within the organization. Here top level management act as a primary decision maker.
Functional structure is suitable:
- When the Size of the organization is large
- When Organization have decentralized authority.
- When the product line have only one product.
- When there is a need for high degree of specialization in operations.
Divisional structure: Grouping the activities on the basis of product is-known as divisional Structure. The large organizations which have more than one product have this kind of organizational structure.
Divisional structure is suitable when:
- When the size of organization is large or is growing.
- When Organization have Centralized authority.
- An enterprise produce more than one product
- When organization need high degree of specialization in product.
