This document discusses and compares functional and divisional organizational structures. A functional structure groups employees by job functions, such as engineering, sales, or customer service. This can improve efficiency but may cause communication and customer problems as a company grows. A divisional structure instead groups employees by products, markets, or geography. For example, a company may have separate divisions for different products or markets they serve. The document analyzes the pros and cons of each approach and emphasizes the importance of selecting the right structure for a company's needs.