In which structure are people with similar occupational specialties grouped into formal units?

• A. Simple Structure
• B. Functional Structures
• C. Divisional Structure
• D. Matrix Structure

Answer: (B)

Grouping people by their specialized occupations into formal units is a functional structure. This arrangement creates departments such as marketing, finance, operations, and human resources, each led by a manager who oversees the skills, processes, and procedures specific to that function. The main payoff is deep expertise, clear career paths within a function, and efficient use of specialized resources and knowledge. It’s especially effective in stable environments where coordinating technical work within each function reduces duplication and streamlines skills development.

In contrast, a simple structure isn’t organized by departments at all—it's a small-scale setup with broad roles and direct supervision by the owner. A divisional structure centers around product lines, markets, or geography, so grouping is by what the organization sells or where it operates rather than by function. A matrix structure mixes functional and project or product leadership, creating dual reporting lines and more cross-functional collaboration, rather than concentrating all specialists into single, function-based units.