Which statement describes functional grouping?

• A. It can lead departments to prioritise their own objectives over the organisation's goals
• B. It reduces interdepartmental conflict
• C. It speeds up decision making
• D. It improves cross-functional collaboration

Answer: (A)

Functional grouping organizes people by their specialized function (for example, marketing, finance, operations). This structure builds deep expertise and efficiency within each function because teams share similar tasks, routines, and metrics. However, it tends to create silos, where each department focuses on its own objectives rather than the organisation’s broader goals. That tendency to prioritise local aims over the overall strategy is a classic drawback of functional grouping, and it can make alignment and coordination across functions more challenging. Consequently, this description fits the impact of functional grouping best. The other effects—like consistently reducing interdepartmental conflict, speeding up decisions across the whole organization, or improving cross-functional collaboration—are less characteristic of a pure functional structure, and usually require additional cross-functional processes to achieve.