B) there is a strong tendency for divisions to focus on short-term performance. 2. Large companies that serve a varied customer base or operate in a number of geographic regions may choose to operate with a divisional structure. 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). A divisional structure has certain disadvantages as well. On this basis any unprofitable division can be closed. It is good for a company which is … Generally, manpower is grouped on the basis of different products manufactured. As with any organization structure, divisional structures have both strengths and weaknesses. Advantages & disadvantages of divisional structures Advantages . 44. Disadvantages of Divisional Structure. Disadvantages of Functional Structure: ... B. Divisional Structure is the organisation structure which is formed on the basis of product specialisation. The activities related to one product are grouped under one division. 3. 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. (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. A divisional structure comprises of separate business units or divisions. Should the company want to diversify … The organizational structure consists of separate divisions, each such division has its own manager. Disadvantages of International Division a. CBSE Class 12 Case Studies In Business Studies – Organising. Divisional results can be assessed: Divisional results (profit/loss) can be assessed easily. If an organisation wants to grow and diversify, the functional structure cannot cope, so instead the divisional structure should be adopted. A divisional structure is a common organizational form used in business. 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. The following are some of the disadvantages of a divisional structure. 2. In this lesson, you'll learn about divisional structures, including their advantages and disadvantages. Growth and Expansion: It facilitates growth and expansion as new divisions can be added without disturbing existing departments. This is a more decentralized type of operation where each division functions much like its own separate company. Advantages of Divisional Organizational Structure Divisions work well because they allow a team to focus upon a single product or service, with a leadership structure that supports its major strategic objectives. Each unit has a divisional manager responsible for performance and who has authority over the unit. 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 … 4. Disadvantages 1. Preventing the design of products with both domestic and international appeal c. Precluding … C) there can be dysfunctional competition among divisions. Divisional organizational structure based on … Fig. B. 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