Page 8 - Lesson Note 2
P. 8
the organisation. the organisation.
It helps in avoiding There is high duplication
duplication of work, so of work among various
Costs cost is minimised. departments. Accordingly,
the costs for the
organisation are high.
Power of decision Each division has the
Decision making is concentrated freedom to take its own
Making at the top level of decisions.
management.
It is more suitable for It is more suitable for
organisations which organisations which deal
Suitability focus on operational with multiple product
specialisation. lines.
Horizontal functional Vertical functional
hierarchy is formed, hierarchy is formed, while
Functional
while the departments devising the departments
Hierarchy
are devised on the basis on the basis of product-
of key operations. line categories.
Management is difficult Management is easier as
as each functional there are independent
manager has to report departments for various
Management
to one coordinating products.
head at the top level of
management.
