Question

Which of the following statements is true about functional organization structure?

A. Small companies experiencing rapid growth are the only organizations to benefit from a functional structure.

B. One of the main disadvantages of the functional structure is the lack of work specialization.

C. Functional structures are extremely efficient when the organization as a whole has a relatively wide focus.

D. One of the main advantages of the functional structure is that it encourages communication across functions.

E. Functional structures are extremely efficient when the organization has fewer product lines or services.

Answer 1

The true statement about functional organizational structure is that it is highly efficient when the organization focuses on a limited range of products or services, encouraging specialized departments to focus on specific tasks.

Step-by-step explanation:

The correct answer to the question is: E. Functional structures are extremely efficient when the organization has fewer product lines or services.

Functional organization structure is ideal for businesses with a limited range of products or services since it allows for a high degree of specialization within each function. Its design is such that each unit or department specializes in a particular business function, such as marketing, finance, or production. In contrast to other organizational structures, the functional structure can lead to efficiency gains due to the specialization and focus on specific tasks.

However, this structure can sometimes inhibit communication across different functions, which can be counterproductive in rapidly changing environments where integration and adaptability are key. Contrary to the claim that it encourages communication across functions, functional structures tend to create silos that may hinder cross-departmental collaboration.