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Functional division is one method of business management. In this system, the organization is divided into various teams according to their functions and all the teams are integrated under senior management consulting of few members. Thus, this is a bottoms-up approach of organizational hierarchy. The functional teams could be engineering, marketing, production, distribution, sales, etc. The idea here is to divide the organization into focused groups or teams or sub-organizations, each of which is responsible for one specific job. The advantage of such system is specialization cultivation, i.e. specialists are cultivated in such teams. People who wish to be leaders in particular discipline are a good fit for such system. Functional division also brings people of similar skills and different experience levels together to solve problems and this concentrates knowledge into niches to maximize the functional performance.
However, a disadvantage is that such specialized teams lack the big picture view (which us controlled by top management) and are concerned with their designated work. This is counter-intuitive to the development of future business leaders. Such teams are also slow to respond to changes in business climate it consumer demand, since only the top management takes decisions in this regard. Contribution of each individual unit to the product development and success is difficult to ascertain in a setup based on functional division.
Hope this helps.
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