In this form of organisation, all activities of the enterprise are grouped and divided according to functions like production, marketing, finance and others. Each department is in the charge of a specialist who is called functional manager. The functional manager has a control over the functions in his charge and no matter on those functions found in other part of the organisation. Functional organisation was advocated by F.W. Taylor. In this organisation activities of foreman are classified into eight sub-divisions which are again included in two broad groups.
At planning level, the specialists are known as route clerk, time and cost clerk, instruction card clerk a shop disciplinarian. A route clerk is meant to lay down steps, time, cost clerk calculates time, cost, instruction card clerk prepares instructions, and the shop disciplinarian is in the charge of observing rules.
At the shop level, the specialists are called gang boss, speed boss, repair boss and the inspector. The gang boss is the in charge of tools, speed boss cares for the speed of the machines, repair boss attends break down of the machines and inspector checks the quality of the products.