B. Divisional Structure An organization which is very large in size and is producing more than one product, they need to evolve a design to cope with the complexity. It is good for a company which is … A divisional structure comprises of separate business units or divisions. Growth and Expansion: It facilitates growth and expansion as new divisions can be added without disturbing existing departments. Should the company want to diversify … In this lesson, you'll learn about divisional structures, including their advantages and disadvantages. If an organisation wants to grow and diversify, the functional structure cannot cope, so instead the divisional structure should be adopted. Large companies that serve a varied customer base or operate in a number of geographic regions may choose to operate with a divisional structure. (i) Departmental Conflicts : Strife may arise among various divisions with regard to decisions and actions of organisation such as those relating to allocation of funds and resources. Disadvantages of International Division a. 4. All of the following are disadvantages of a divisional type of organizational structure except A) it can be very expensive compared to a functional organizational structure. Disadvantages of Functional Structure: ... B. Divisional Structure is the organisation structure which is formed on the basis of product specialisation. 3) Divisional structure: Is a type of grouping employees according to either a product or a project and can be extended to a geographical location or based on customers as shown in Figures (4) and (5). The following are some of the disadvantages of a divisional structure. Each unit has a divisional manager responsible for performance and who has authority over the unit. On this basis any unprofitable division can be closed. B) there is a strong tendency for divisions to focus on short-term performance. Fig. The organizational structure consists of separate divisions, each such division has its own manager. A divisional structure is a common organizational form used in business. Disadvantages of Divisional Structure. As with any organization structure, divisional structures have both strengths and weaknesses. 44. Divisional organizational structure based on … C) there can be dysfunctional competition among divisions. 2. The activities related to one product are grouped under one division. Preventing the design of products with both domestic and international appeal c. Precluding … CBSE Class 12 Case Studies In Business Studies – Organising. Part 4 Organizational Processes Evaluating Divisional Structures Slide 17 Evaluating Divisional Structures • Advantages of divisional form-building block structure -- accommodates growth-handles product, client diversity well • Disadvantages of divisional form-more resource duplication, underutilization-creates silos of knowledge-less cooperation across units Matrix Structure … 3. Generally, manpower is grouped on the basis of different products manufactured. There may be conflicts among the different division heads, as in pursuit of higher profits, each of them may seek maximum allocation of resources at the cost of other divisions. The potential conflict between domestic and international operations (Managers in the international division may feel like “second class” citizens if they are not at the same hierarchical level as managers in domestic operations) b. Disadvantages 1. A divisional structure has certain disadvantages as well. 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