Departmentalization based on the primary functions performed within an organizational unit.

• A. Functional Departmentalization
• B. Geographic Departmentalization
• C. Line Organization
• D. Managerial Hierarchy

Answer: (A)

Departmentalization by function is about grouping activities by the main type of work or expertise people perform, such as marketing, finance, operations, and human resources. This setup creates specialized departments led by functional managers, which helps build deep expertise, standardize processes within each function, and streamline training and resource use. It’s especially effective when work within each function benefits from tight coordination and shared skills.

Why this fits the prompt: it directly describes organizing units based on the primary functions performed, which is the defining idea of functional departmentalization.

Other approaches don’t fit this specific basis. Organizing by geographic location groups activities by place rather than by the type of work. Line organization refers to how authority and commands flow in the chain of command, focusing on reporting relationships rather than how departments are formed. Managerial hierarchy concerns levels of management rather than the criterion used to group work into departments.