What organizational structure is characterized by dividing the organization by areas of expertise or specialization?

The organizational structure characterized by dividing the organization by areas of expertise or specialization is known as a functional structure. In a functional organization, departments are organized based on their functions, such as marketing, finance, human resources, and production. Each department is led by a department head who has specialized knowledge in that area, allowing for greater efficiency and productivity within each function. This structure encourages depth in expertise and fosters skill development, as employees work closely with others in similar roles.

Functional organizations are effective for projects that require deep specialization and continuous operational tasks, as team members within a function can collaborate effectively by leveraging their expertise. However, projects that require extensive coordination across different functions may face challenges, as communication between departments can become more complex.

Other structures like projectized or matrix are designed to enhance cross-functional collaboration and may not strictly adhere to a division based solely on specialization.