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Q.(a) State any two circumstances under which the functional structure will prove to be an appropriate choice.

(2)
(b) "This determines the level of management in the organization structure." Identify it and explain. (3)
Kerala DhseKerala DHSE Plus Two Commerce Board 2026Subjective· 5mImportance★★★★★
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From Kerala Plus Two (DHSE) Commerce Organising: (a) a functional structure suits a large, single/limited product-line firm needing specialisation; (b) the factor that decides the number of levels of management is the span of management (span of control) — a narrow span means more levels (tall structure), a wide span means fewer levels (flat structure).

(a) Two circumstances where a functional structure is appropriate (2 marks):

A functional structure groups jobs of a similar nature together into departments such as production, marketing, finance and personnel. It is an appropriate choice when:

  1. The organisation is large in size, has diversified activities and its operations require a high degree of specialisation — grouping by function then allows specialists to be concentrated in each department.
  2. The organisation produces a single product or a limited/related range of products — since there is no need to organise around different products, functional departmentation is efficient and economical.

(b) Identify and explain 'this determines the level of management' (3 marks):

  • The element referred to is the span of management (also called span of control).
  • Span of management means the number of subordinates that a manager can effectively manage and control. It has a direct bearing on the number of levels of management in the organisation.
  • A narrow span (a manager supervises few subordinates) results in a larger number of levels — a tall structure with close supervision but slower communication and higher managerial cost. …

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