Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Functional departmentation primarily organizes employees based on what criteria?

1. Geographic location

2. Business type

3. Tasks performed

4. Product lines

The correct answer is: Tasks performed

Functional departmentation organizes employees based on the specific tasks they perform within the organization. This approach enables a company to group individuals who have similar skills and responsibilities, such as marketing, finance, human resources, and production. By structuring the organization in this way, it promotes operational efficiency and specialization, allowing employees to develop expertise in their respective areas, enhancing both productivity and the quality of work. Grouping employees according to tasks allows for streamlined processes and better communication within those functions, fostering collaboration and more effective problem-solving. Functional departmentation supports clear accountability and performance measurement, as each department's goals and outputs can be monitored and managed effectively. In contrast, organizing by geographic location may lead to duplication of functions in different regions, which can dilute focus on the specific tasks. Organizing by business type or product lines might overlook the efficiency gains that come from concentrating expertise within functional areas.