Organisational Structure & Types of Organisation Structure

1 Mark Questions

1. Distinguish between functional structure and divisional structure on the basis of formation. (Compartment 2014)

Ans. Functional structure is formed on the basis of functions, whereas divisional structure is formed on the basis of various product lines, which is further supported by functions.

2. Define organisation as a structure. (Foreign 2014)

Ans. An organisation structure can be defined as the framework within which managerial and operating tasks are performed. It specifies the relationships between people, work and resources.

1. State the suitability of functional structure of organising. (Compartment 2014)

Ans. Functional structure is roost suitable when the size of the organisation is large, has diversified activities and operations requires a high degree of specialisation.

3 Mark Questions

1. Identify the type of suitable organisational structure for a large scale

organisation having diversified activities requiring high degree of specialisation in operations. (HOTS; All India 2013)

Ans. Functional structure Under functional structure, an organisation is divided into different departments or units on the basis of major functions performed. All departments report to a coordinating head, e.g. in a manufacturing concern the key functions will include production, purchasing, marketing, personnel, etc. This structure tries to achieve high level of specialisation by grouping similar jobs together.

1. Explain when and why the need is felt for having a framework, within which

managerial and operating tasks are performed to accomplish desired goals. Name this framework also. (HOTS; Delhi 2010)

Ans. It is an organisational structure.

Need of organisational structure is felt in the following cases:

1. It is required when an organisation grows in size or leads to complexity.
2. It is required when an organisation is new and is required after planning but before staffing.
3. It is required as it helps in effective administration, expansion, growth and better utilisation of resources.

1. In a fashion designing unit, following are the main functions
2. Manufacturing (ii) Finance
3. Marketing

Which organisational structure will you prefer for this type of a company and why? (HOTS; Delhi 2009C)

Ans. For this company, functional organisational structure will be more appropriate. It has the following advantages:

1. It promotes control and coordination within a department because of similarity in the tasks being performed.
2. It helps in increasing the managerial and operational efficiency and this results in increased profit.

4/5 Mark Questions

1. A steel manufacturing company has the following main jobs
2. Manufacturing
3. Finance
4. Marketing (iv)Personnel
5. Research and development

Which type of organisational structure will you choose for this type of a company and why? State any four advantages of this organisational structure. (HOTS; Delhi 2010C)

Ans. I would suggest the functional organisational structure as all these major functions could be performed well under separate departments.

It offers following advantages

1. A functional structure leads to occupational specialisation since emphasis is placed on specific functions.
2. It promotes control and coordination within the department.
3. It helps in increasing managerial and operational efficiency.
4. It leads to minimal duplication of effort. Hence, it is economical.

8. Aman runs a factory wherein he manufactures leather shoes. The business is doing well and he intends to expand by diversifying into leather bags as well as leather jackets. Which type of organisation structure would you recommend for his expanded organisation and why? Give two reasons. (HOTS; All India 2009)

Ans. I would recommend the divisional organisational structure.

This is because (Any two):

1. The number of main products is more than one.
2. Different manufacturing technologies and marketing methods are required.
3. Each division is equipped with its own resources in order to function independently