What is Functional Organization?

Legal Definition
Functional organization is a type of organizational structure that uses the principle of specialization based on function or role.

It allows decisions to be decentralized since issues are delegated to specialized persons or units, leaving them the responsibility of implementing, evaluating, or controlling the given procedures or goals.
-- Wikipedia
Legal Definition
The classic organizational structure. Hierarchically grouped employees, clear line management authority, and upward reporting to the single top leader. Downward hierarchy, with one top person, distinct lines of reporting, authority, and communication.