Which type of structure organizes units based on the activity or function performed?

The functional structure organizes units based on the specific activities or functions that they perform within an organization. This type of structure allows for specialization, as employees are grouped according to their skills and expertise. For example, separate departments may be dedicated to marketing, finance, human resources, and production, which encourages efficiency and effectiveness within these distinct functions.

Each department operates independently, focusing on its specific role, while coordination between functions typically occurs at higher management levels. As a result, this structure is beneficial for organizations seeking to enhance operational efficiency and develop deep expertise.

In contrast, other structures, such as product-based, matrix, and customer-based, prioritize different organizing principles rather than solely focusing on function. The product-based structure centers around the different products or services offered, while the matrix structure combines functional and product-based approaches to improve flexibility and communication across the organization. The customer-based structure, on the other hand, organizes teams around customer segments. These different focuses highlight why the functional structure is the most appropriate answer when specifically considering organization by activity or function.