Answer to Question 1
There are three main organizational structures: functional, product, and matrix. Functional is the most basic form. They are departmentalized by the functions people perform. There is some saving of resources by avoiding duplication of functional effort, people can specialize, and you gain economies of scale. However, it narrows the perspective of the employee and is not flexible. Product departmentalizes by the functions necessary to produce and market a product. Each unit is self-contained and is its own cost center. It improves profit accountability, tax accounting, and clear lines of authority. However, you lose economies of scale and it is more difficult to attract and retain talent. Matrix combines product and functional structures. You gain economies of scale, the ability to share resources, and flexibility to adapt quickly to the market. However, the dual reporting relationships and the consistently high cooperation levels required for success can be challenging
Answer to Question 2
FALSE
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