ACCA Applied Knowledge · Business and Technology · Business organisational structure
A company arranges its activities into departments called Production, Marketing, Finance and Human Resources, with each department containing people who carry out a similar type of work. Which basis of departmentation is being used?
The company uses functional departmentation. Staff are grouped by the specialist activity they perform, such as production, marketing, finance or HR, rather than by location, product line or customer type. This builds specialist expertise within each department.
- AGeographical
- BFunctionalCorrect
- CProduct
- DCustomer
Explanation
Grouping staff by the specialist work they perform (production, marketing, finance, HR) is functional departmentation. Geographical grouping would use locations, product grouping would use goods or services, and customer grouping would use client types.
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