SQA Higher Business Management Practice Exam

A significant disadvantage of having departments in functional grouping is that they may focus too narrowly on their individual goals. This departmental focus can lead to a lack of alignment with the organization's overall objectives, resulting in silos where departments operate independently without regard for the broader company strategy. When each department prioritizes its specific targets, this can inhibit communication and collaboration between departments, ultimately affecting the organization's ability to operate cohesively.

In contrast, the other options describe positive aspects of functional grouping. For instance, the ability of departments to rapidly adjust to external market changes suggests responsiveness and adaptability, which are advantageous traits in a competitive environment. Similarly, when departments collaborate to enhance overall performance, it indicates a strength in teamwork and shared objectives. Streamlining operations is also a benefit, as it can lead to greater efficiency and productivity. However, these positive aspects can be overshadowed by the potential negative impact of departmental isolation and misalignment with the organization's strategic vision.