An organizational structure is basically the hierarchical concept of subordination which is there for achievement of one common goal. There are a number of types of organizational structures and functional structure is one of them.
A Functional structure is actually an organizational structure that groups together employees from the same function of specific jobs within an organization. Employees that specialize in a single function are grouped together to form a department.
The division of structure in a standard organization could be something like:
Research and development
Marketing and sales
Administration and Human Resource.
Functional structures are most suitable to the organizations that specialize in a single product or a group of similar products.