Explain the functional structure

What will be an ideal response?

A functional structure organizes its activities according to the specific functions that a company performs.
Functional structures tend to work best in smaller firms and those with few products or services. Functional
organization helps managers of smaller firms improve efficiency and quality by fostering professionalism in the
performance of specialized tasks. However, as firms grow and become more complex (perhaps by venturing into
multiple lines), a functional form can become dysfunctional. Often, problems arise if each functional unit begins to
focus too narrowly on its own goals and operations, thus losing sight not only of other functional activities but of
customer needs and corporate objectives. This phenomenon has given rise to the term functional silos. The functional
organizational model may also exacerbate problems in multiproduct, multimarket firms. Expansion, whether into
product or geographic markets, can become problematic if the strategy that's appropriate in one market doesn't
work very well in another. The types of products, for example, that enjoy dominant domestic share may not meet
the needs of foreign consumers. Similarly, a firm involved in two different product markets may find that the same
competitive methods don't work equally well in both or that different markets call for different sales channels.
When a functional structure is used in contexts characterized by varying market demands and sales characteristics,
functionally structured organizations may be sluggish in responding to changing customer demands and in
accessing potential new customers.