Functional organization refers to a type of organizational structure where the organization is divided into different departments based on their functions. These functions may include marketing, finance, sales, production, and many others. Some of the synonyms that can be used for the functional organization include bureaucratic organization, hierarchical organization, and departmentalized organization. Bureaucratic organization refers to a structured system of rules and regulations that govern the functioning of an organization. Hierarchical organization describes an organization where authority and responsibilities are handed down through a chain of command. A departmentalized organization is one that divides its functions according to different departments. All these terms are used interchangeably with functional organization and describe the same type of organizational structure.