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CSEET · Business Laws and Management · Functions of Management

Grouping of activities and employees into manageable units such as production, marketing and finance on the basis of the functions performed is known as:

Functional departmentation is correct. It groups similar activities and people by the major business functions they perform, such as production, marketing and finance. The other forms use geography, product lines or customer types as the basis, which the description does not mention.

  1. AFunctional departmentationCorrect
  2. BTerritorial departmentation
  3. CProduct departmentation
  4. DCustomer departmentation

Explanation

When units are formed according to the major functions of the business, such as production, marketing and finance, it is functional departmentation. Territorial grouping uses geography, product grouping uses product lines, and customer grouping uses types of buyers, so none of these fits the description.

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