The difference between functional and divisional structure can be drawn clearly on the following grounds:
1.meaning
The functional structure is described as an organisational structure wherein; the employees are classified on the basis of their area of specialisation. An organisational structure so designed that it is bifurcated into semi-autonomous divisions on the basis of product, service, market, etc., is known as the divisional structure.
2.specialisation
In the functional structure, the specialisation is based on functions. On the other hand, divisional structure, the specialisation depends on product lines.
3.Fixation of responsibility
In the functional structure, it is really difficult to fix responsibility, i.e. Suppose a product does not perform well in the market, then it is difficult to identify, that which department (production, sales, finance, etc.) of the organisation is not doing well. As opposed to, the divisional structure where it is easy to fix responsibility, as every product of the organisation has separate departments.
4.management development
Managerial development is not easy in functional structure due to the absence of autonomy of decisions, as the decisions are guided by top management. As against this, divisional structure there exists autonomy of decisions. Hence managerial development is easier.
5.cost
The cost involved in functional organisation structure is comparatively less as the functions are not repeated. Unlike, the divisional organisational structure wherein there is the repetition of resources, and so it is costly.
6.Suitablity
The functional structure is best suited to those organisation which is small and simple. As compared to divisional structure, which is appropriate for those organisations, that are large and dynamic.
