ABSTRACT
Effective business performance is that which achieves objectives which contribute to the survival and prosperity of the company. In both Chapter 2 and Chapter 5, the importance of objectives in determining the operations of the business was discussed. Also in Chapter 2 the principle of equifinality was mentioned. If we apply this principle to the organization of a company, we must conclude that there is more than one way to organize for effective business performance; and the diversity of modern company structures confirms this. One of the most specific and obvious differences is in the bases that different companies use for grouping their activities. In this chapter, it is intended to discuss the most commonly used bases for grouping activities, and to attempt to show the superiority of certain groupings. This will not contradict the principle of equifinality, since, although there may be many ways of reaching the same conclusion from a particular starting point, at a given time and in given circumstances, there are advantages, in such areas as efficiency or flexibility, in grouping activities in one way rather than another.
