Organising — Business Studies STD 12 Commerce — Question

The organizational structure can be classified under two categories which are as follows:

1. Functional structure and
2. Divisional structure

Functional structure: Grouping of jobs of similar nature under functional and organizing these major functions as separate departments creates a functional structure. All departments report to a coordinating head. For example, in a manufacturing concern division of work into key functions will include production, purchase, marketing, accounts and personnel. These departments may be further divided into sections.



Divisional structure: In a divisional structure, the organisation structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit. Each division is multifunctional because within each division functions like production, marketing, finance, purchase etc, are performed together to achieve a common goal.