Explain one advantage of a functional organizational structure for ABC.

• A. It allows specialist expertise in areas such as R&D, finance, and operations, which may improve efficiency.
• B. It eliminates coordination between departments.
• C. It ensures quick cross-functional decision-making with no hierarchy.
• D. It guarantees lower costs than other structures.

Answer: (A)

Grouping staff by function focuses work in specialized areas such as R&D, finance, and operations. This deepens expertise in each area, leading to more efficient processes, standardized ways of working, and better use of resources within each function. When specialists repeatedly handle similar tasks, they learn best practices and can apply them consistently, which boosts overall efficiency across the organization.

Coordination across departments is still needed, and functional structures can create silos that make cross-functional collaboration slower. The hierarchy can also slow quick, cross-department decisions, and costs are not automatically lower—the cost advantages depend on context and may arise but are not guaranteed.