Functional Decomposition


DEFINITION of 'Functional Decomposition'

A method of business analysis that dissects a complex business process to show its individual elements. Functional decomposition is used to facilitate the understanding and management of large and/or complex processes and can be used to help solve problems. Functional decomposition is also used in computer engineering to help with software design.

BREAKING DOWN 'Functional Decomposition'

Basically, functional decomposition takes something complicated and simplifies it. The individual elements of the process and their hierarchical relationship to each other are commonly displayed in a diagram called a functional decomposition diagram. Other common business methods for simplifying complex problems and processes include decision trees, which allow users to consider multiple possible solutions to a problem, and flow charts, which show the sequence of a process.

  1. Decision Tree

    A schematic tree-shaped diagram used to determine a course of ...
  2. Financial Modeling

    The process by which a firm constructs a financial representation ...
  3. Standard Deviation

    1. A measure of the dispersion of a set of data from its mean. ...
  4. Correlation

    In the world of finance, a statistical measure of how two securities ...
  5. Covariance

    A measure of the degree to which returns on two risky assets ...
  6. Regression

    A statistical measure that attempts to determine the strength ...
Related Articles
  1. Investing Basics

    Regression Basics For Business Analysis

    This tool is easy to use and can provide valuable information on financial analysis and forecasting. Find out how.
  2. Investing Basics

    One Portfolio For Asset Allocation

    If you treat all of your investments as a single portfolio, you will be better able to maximize returns.
  3. Active Trading

    An Introduction To The Relative Strength Index

    Learn the difference between relative strength and the relative strength index, a frequently used technical analysis oscillator.
  4. Active Trading Fundamentals

    Do Financial Decisions Get Better With Age?

    Like a fine wine, you no doubt get better as you get older, but your money choices might not.
  5. Options & Futures

    Multivariate Models: The Monte Carlo Analysis

    This decision-making tool integrates the idea that every decision has an impact on overall risk.
  6. Stock Analysis

    Southwest Vs. Virgin Vs. JetBlue: Comparing Business Models

    Compare and contrast the business strategies and philosophies of three anti-establishment U.S. airlines: Southwest Airlines, Virgin America and JetBlue.
  7. Entrepreneurship

    10 Ways to Be a Successful Entrepreneur

    Are you hoping to launch your own business and work for yourself? If so, here are the top 10 tips for entrepreneurs.
  8. Investing

    Expedia's New Buy Could be a Game Changer for Airbnb

    As P2P platforms revolutionize the hotel industry, older players must evolve to compete.
  9. Stock Analysis

    Analyzing Porter's 5 Forces on Facebook

    Read about how you can use Porter's five forces to analyze Facebook's competition. This simple methodology looks at several different factors or forces.
  10. Investing

    Protect Your Creations--Register Your Trademark

    Federally registering your brand name or logo offers the broadest protection against potential trademark infringement.
  1. How has Google's operations strayed from its original mission statement?

    Google's (GOOG) mission statement has been the same since its inception in 1998: "Organize the world's information and make ... Read Full Answer >>
  2. What are the differences between product bundling and product lines?

    The difference between product bundling and product lines is a product line is a group of related products manufactured by ... Read Full Answer >>
  3. What are some examples of businesses that use market segmentation?

    Numerous types of businesses use market segmentation to optimize their ability to sell to a wide variety of consumers. From ... Read Full Answer >>
  4. What is the difference between the cost of capital and the discount rate?

    The cost of capital refers to the actual cost of financing business activity through either debt or equity capital. The discount ... Read Full Answer >>
  5. How does the market share of a few companies affect the Herfindahl-Hirschman Index ...

    In economics and commercial law, the Herfindahl-Hirschman Index (HHI) is a widely used measure that indicates the amount ... Read Full Answer >>
  6. How does transfer pricing help business?

    Transfer pricing involves the trade of goods or services between two related companies, and both can come out the winner. ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  2. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  3. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  4. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  5. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  6. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
Trading Center