What organizational structure groups departments by product?

What organizational structure groups departments by product?

• A. functional structure
• B. product structure
• C. geographic structure
• D. matrix structure

Answer: (B)

Organizing by product means grouping all the functions needed to support a specific product into one product line. In this setup, design, development, manufacturing, marketing, finance, and other functions aligned to that product report to a product manager or product division, so decisions and resources focus on that product’s performance and lifecycle. This structure speeds responses to market changes, improves accountability for each product’s success, and fosters cross-functional collaboration within the product team. By contrast, a functional structure groups departments by specialty (like HR, finance, marketing across the whole organization), a geographic structure groups by region or country, and a matrix structure blends dimensions (such as product and function) with dual reporting lines, making management more complex.

Organizing by product means grouping all the functions needed to support a specific product into one product line. In this setup, design, development, manufacturing, marketing, finance, and other functions aligned to that product report to a product manager or product division, so decisions and resources focus on that product’s performance and lifecycle. This structure speeds responses to market changes, improves accountability for each product’s success, and fosters cross-functional collaboration within the product team.

By contrast, a functional structure groups departments by specialty (like HR, finance, marketing across the whole organization), a geographic structure groups by region or country, and a matrix structure blends dimensions (such as product and function) with dual reporting lines, making management more complex.