Which of the following best describes functional grouping in an organization?

Functional grouping in an organization refers to the practice of organizing employees based on their specific roles or functions within the company. This approach allows individuals with similar skills and expertise to be grouped together, facilitating collaboration and specialization. For example, all marketing employees may be in one department, while finance and human resources teams are organized separately. This structure enhances efficiency and improves communication among team members who share the same expertise, leading to better productivity as individuals focus on their areas of specialization.

In contrast, other options describe different organizational strategies. Grouping employees based on geographic location is a method that focuses on physical distribution rather than function, while organizing teams by project requirements highlights a more flexible, project-based focus rather than functional consistency. Arranging employees in a flat structure seeks to reduce hierarchical levels but does not inherently relate to functional grouping, which can exist in both flat and hierarchical organizations. Therefore, the option that best captures the essence of functional grouping is the one that emphasizes organizing personnel by their individual functions or roles.