i) Functional Organizational Structure
A functional organizational structure is an organizational structure where employees are grouped hierarchically, managed through clear lines of authority, and report ultimately to one top manager.
(2 marks)

ii) Factors to Consider in Designing an Organizational Structure:

• Size of the Organization: The size of the firm is a major determinant of the structure to adopt. If the organization is a small one consisting of only a few employees, the functional structure, for example, would be suitable.
• The Chosen Strategy: The nature of the strategy being pursued by the organization will determine the structure to operate. For example, a company pursuing a non-growth strategy would have a different structure from a company with an ambitious growth strategy.
• Management Style/Philosophy: The structure adopted by an organization is largely influenced by the management style of the owner(s) or management. An autocratic leader will likely favor a centralized structure.
• Geographic Dispersion: If an organization is spread over a wider geographical area, it will require a structure that enables management to have effective control over the branches.
• Nature of Goods/Services: The nature of goods or services produced and supplied by the firm will be a critical factor to consider when deciding on the type of organizational structure to adopt.