In this article, you will learn the functions of an organization and the different departments in an organization. The organization has a very specific and targeted goal that can be achieved by working together under one platform.

What Is Organization In Business Terms

An organization is a group of people who do activities for earning a profit, A group of people who do work together and have one specific target or goal and work within a specific boundary.

What Is Office In An Organization

The office is part of an organization and it is the center of information in an organization. The common function of an office is the following,

What Is an Organizational Chart

An organization chart is a way of showing different roles and relationships of the formal structure, this can be shown through the organization chart and by its function.

If we talk about the Organization chart and its function then simply an organization is a diagram that shows the relationship within an organization and by its function, it shows how an individual is connected with each other in an organization.

  1. The units into which an organization is divided and how they relate to each other.
  2. Communication and reporting channels.
  3. The structure of authority, responsibility, and delegation.
  4. Problems in these areas such as excessively long lines of communication, and a lack of coordination between units and authority.

The most common form of an organization chart is a vertical organization chart, which shows the flow of authority downwards through the different levels of the organization.

A simple example of an organization chart,

Functions Of An Organization
An Organizational Chart

What Are The Functions Of An Organization

There are different functions of an organization, followings are the main functions and departments of any organization.

What Is Functional Departmentation

Functional departmentation in an organization involves setting up a department for people who do the same job or perform similar services. The primary functions in an organization are production, sales, general administration, and finance.

Organization chart by function
Organization Chart By Function

What Is Geographical Departmentation

The geographical organization is structured according to geographic areas, some authority is retained at the head office but back-to-back operations are handled on a territorial basis

Many sales departments are usually territorial.

Geographical departmentation
Geographical Organization Chart

What Is Product/Brand Departmentation

Some organization works on a large scale so they make their different departments and the product or brand department is one of them. Usually, this department is made in multinational companies.

Top 5 multinational companies

  1. Nestle
  2. PepsiCo
  3. Sony
  4. Citigroup
  5. Procter & Gamble
Product/Brand departmentation
Product Organization Chart

What Is the Centralization/Decentralization Function

  1. Many organization admin functions are done in the head office as much as possible because they do not give authority to do the work by others, this is centralized.
  2. When admin tasks are carried out at different locations that function is referred to as decentralized.

Practice Question

Question no.1

Which of the following is not a function of the purchasing department?

  1. Ensure to purchase needful goods only.
  2. Ensure that the supplier gives the best price
  3. Paying supplier’s invoices


3. Because the accounting department will pay the supplier’s invoices.

Question no. 2

Which of the following personnel in an organization would not be involved in purchasing of material?

  1. Credit Controller
  2. Store manager
  3. Account clerk
  4. Purchasing manager


1. The credit controller deals with the credit customers, not with the purchasing of material.

Question no. 3

Business organizations consist of three major functions which are those:

  1. Production, marketing, and finance
  2. Marketing, finance, and distribution
  3. Finance, selling, and developing product
  4. Production, marketing, and developing a product


1. Production, marketing, and finance, the business has these three major functions in the organization.

Question no 4.

A business organization is formed for which the purpose of?

  1. It is formed for the commercial purpose
  2. it is formed for the purpose of operation
  3. The main purpose of forming an organization is to create opportunities
  4. It is always forming with the vision of employment


1. It is formed for the commercial purpose

General Questions

What are the primary functions of an organization?

The primary functions of an organization are achieving goals, planning for the objectives, organizing the operations, controlling, and decision-making.

What are the major functions of a human resources manager in an organization?

A human resources manager is responsible for hiring and firing employees, developing skills in the staff, managing the benefits for employees, developing the organization, and checking the performance of an organization.

What are the major principles of an organization?

The main principles of an organization are the followings:

  1. Setting and achieving the goals of an organization
  2. Making structure and design of an organization and brand
  3. Planning and execution
  4. Decision Making
  5. Effective communication
  6. Motivation and improvement
  7. Creating opportunities

What are the 4 common characteristics of an organization?

  1. Identical goal
  2. Well structured
  3. Effective communication
  4. Specialization

What are the 5 functions of an organization?

Following are the 5 core functions of an organization

  1. Production
  2. Marketing
  3. Selling
  4. Finance
  5. Storing finished goods

What do you mean by management of a business organization?

Management of a business organization means planning, executing, decision-making, and controlling the whole activities of the organization.

What are the main types of business organizations?

The followings are the main types of business organizations:

  1. Sole proprietorship
  2. Partnership
  3. Cooperative society
  4. Cooperation
  5. NGOs