Learn in the textbookOrganizational Structures
DefinitionA functional organization (機能別組織) divides its departments by work function, such as development, production, sales and accounting.
ExplanationBecause people with the same specialty gather in one department, knowledge and skills build up easily and the same work is not duplicated across departments. On the other hand, finishing a single product takes several departments working together, and cross-department coordination tends to land on top management.
AnalogyIt is like a restaurant kitchen split into grill, fryer and plating stations. Getting one dish out requires the stations to work together.
Memory hookIf departments named for what they do, such as Sales or Accounting, each appear only once and nothing is grouped by business, it is a functional organization.