Departmentation by Function

The basic aim of functionalisation is to simplify complexity by grouping all the work to be done into major functional departments . The functional structure is the most widely used form because of its simple logic and common sense appeal . Here activities are grouped together by common function .It is commonly described as organizing work into related bundles of skill . Each functional unit has a dissimilar set of duties and responsibilities . In a university , functional structure would mean a set of departments like marketing , management , business economics , finance etc . Thus , similar and related occupational specialities are grouped together . Functional structure tries to incorporate the positive aspects of specialization . Theoratically speaking , management tries to create the most efficient department by having identifiable departments of specialists . Companies like Brittania , Bata , Maruti Udyog , etc follow the functional structure , even today . In Modi Xerox for example , the engine of growth is the uniform skills of its people . By injecting the same set of abilities , the company ensures that one functional department like marketing can handle diverse products . ( Business today , August 7-21 , 1995 ) General Manager || | | Production Sales Finance

The above figure shows a simplified functional form of organization design . It is simplified because it does not show all the functions commonly found in a large organization . It is functional because the basic organization design is built around activities of production , sales and finance .