Final answer:
Functional structures are common in organizations with a high level of specialization and division of labor, often having a vertical hierarchy and centralized decision-making.
Step-by-step explanation:
Functional structures are typically found in organizations where there is high level of specialization and division of labor. A functional structure is characterized by departments that are separated based on their function within the company, such as marketing, finance, operations, and human resources. In such an organizational structure, activities are grouped together by common functions from the bottom to the top of the organization. This arrangement allows for specialization and efficiency within departments.
Contrary to having a flat organizational hierarchy, functional structures tend to be more vertical, with clear lines of authority and communication. Decision-making in a functional structure is often centralized, with decisions coming from the top and cascading down through the various functional departments. In terms of collaboration, while there is a focus on efficiency and expertise within departments, the nature of a functional structure can sometimes lead to silos where interdepartmental communication and teamwork are less emphasized.
Therefore, among the provided options, functional structures are usually found in organizations where there is a high level of specialization and division of labor (option 1), rather than options 2, 3, or 4 that are more characteristic of other organizational formats such as flat or team-based structures.