In a functional structure, employees are grouped by what criterion?

• A. Specialism or function
• B. Geographic region
• C. Product line
• D. Customer segment

Answer: (A)

Grouping by function and skill defines a functional structure. In this setup, employees are organized into departments such as finance, marketing, human resources, and operations, each focused on a specific function. This concentrates expertise, standardizes processes, and clarifies reporting within each function. The defining feature here is organizing by function or specialization, not by geography, product line, or customer segment. If the organization were grouped by geography, product, or customer, it would be a regional, product-based, or market/segment structure rather than a pure functional one.