The Total solution for NCERT class 6-12
The following points highlight the difference between a functional structure and a divisional structure.
Basis of Difference
Functional structure
Divisional structure
Creation
These are created on the basis of functions.
These are created on the basis of product-lines along with the functions.
Costs
It is economical.
It is not very economical because all the resources are required in different departments.
Decision Making
Decision making is centralised as the decisions are taken by the coordinating head for various departments.
Decision making is decentralised as each division of the product line have their own decision making authority.
Duplication of work
Due to functional specialisation overlapping of work is minimised.
Due to each product department having the same functions, overlapping of work is increased.
Suitability.
It is suitable for all types of organisations.
It is suitable for multiproduct or diversified firms.
Accountability and responsibility
Difficult to make accountable as departments are interdependent
Easy to fix the accountability as departments work independently.
Coordination
Compared to Divisional less when company is producing more product.
Better coordination because all the activities related to one product are in one department only.