| S.No | BASIS | FUNCTIONAL STRUCTURE | DIVISIONAL STRUCTURE |
| 1. | Formation | Formation is based on functions | Formation is based on product lines and is supported by functions. |
| 2 | Specialisation | Functional specialisation. | Product specialisation. |
| 3 | Responsibility | Difficult to fix on a department. | Easy to fix responsibility for performance. |
| 4 | Managerial Development | Difficult, as each functional manager has to report to the top management. | Easier, autonomy as well as the chance to perform multiple functions helps in managerial development. |
| 5 | Cost | Functions are not duplicated hence economical | Duplication of resources in various departments, hence costly |
| 6 | Coordination | Difficult for a multiproduct company. | Easy, because all functions related to a particular product are integrated in one |
