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प्रश्न
What is a divisional structure? Discuss its advantages and limitations.
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उत्तर
A divisional structure in an organisation comprises of separate business units and division. Each unit has a divisional manager who has the authority of the unit and is responsible for the performances of the unit.
The advantages of divisional structure are as follows:-
• Product Specialisation helps in the development of the skills as it gains experience from all forms regarding that product. This helps in achieving high aims with it.
• Divisional heads are accountable for profits, as revenues, cost related to different departments can be easily identified and assigned to them. This provides a proper basis for management. It also takes responsibility in poor performances and takes actions accordingly.
• It promotes flexibility and initiative as each division functions as an autonomous unit and it leads to further decision making.
• It provides expansion and growth as new divisions can be added without interrupting the existing ones by assigning new head and staff for the new division.
Limitations of divisional structure are as follows:-
• It may lead to a conflict because of formation of similar divisions due to different policies and different allocation of funds and each division will try to maximise its profit at the cost of the other.
• Creation of similar type of divisions leads to increase in the expenditure as there may be duplication of activities across products.
• It grants the manager the supreme authority to exercise his controls related to a particular division. In course of time such a manager may become selfish and see his own interests ignoring the organisations interest.
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संबंधित प्रश्न
Name the type of 'organisational structure' which promotes efficiency in utilisation of manpower.
Name the organizational structure which helps in increasing managerial and operational efficiency.
Answer the following question:
Aradhana and Gandharv are heads of two different departments in 'Yumco Ltd.' 'They are efficient managers and are able to motivate the employee of their respective departments to improve performance. However, their drive to excel in their own sphere of activity instead of giving emphasis on objectives of the enterprise has hindered the interaction between the departments that Aradhana and Gandharv are heading. Often there are inter-departmental conflicts and they have become incompatible. This has proved to be harmful in the fulfillment of the organisational objectives. The situation has deteriorated to such an extent that the CEO of 'Yumco Ltd.' has hired a consultant, Rashmi, to resolve the problem. After studying the situation closely, Rashmi found that the problem has arisen due to inflexibility and a narrow perspective on the part of both Aradhana and Gandharv. She is of the view that this situation is a result of the type of organisational structure 'Yumco Ltd.’ has adopted.
From the above information, identify the organisational structure adopted by ‘Yumco Ltd.’ and state any three advantages of the structure so identified.
Differentiate between formal and informal organisations on the basis of the flow of communication.
State any three limitations of divisional structure of an organisation.
State any two advantages of Formal Organisation
Differentiate between formal and informal organization on the basis of the following:
Authority
A company X limited manufacturing cosmetics, which has enjoyed a pre-eminent position in business, has grown in size. Its business was very good till 1991. But after that, new liberalised environment has seen entry of many MNC’s in the sector. With the result the market share of X limited has declined. The company had followed a very centralized business model with Directors and divisional heads making even minor decisions. Before 1991 this business model had served the company very well as consumers had no choice. But now the company is under pressure to reform. What organisation structure changes should the company bring about in order to retain its market share? How will the changes suggested by you help the firm? Keep in mind that the sector in which the company is FMCG.
It refers to the number of subordinates that can be effectively managed by a superior:
Grouping of activities on the basis of product lines is a part of
In what way an informal structure would benefit the organization?
Which of the following gives shape to the organisation structure?
Which of the following is a disadvantage of divisional structure?
______ ensures that the heads of separate business units in the organisation are responsible for profit or loss of their unit and have authority over it.
Which type of organisational structure is the most suitable when the size of the organisation is large and is producing one line of product?
______ is the process of dividing work into manageable activities and then grouping the activities which are similar in nature.
Aarohan Ltd. is a company manufacturing automobiles where division of work into key areas includes production, purchase, marketing, accounts and personnel. Which of the following is a disadvantage of the organization structure of Aarohan Ltd.?
| Due to spread of COVID-19 pandemic, employees of almost all the companies were working online from their homes. In 2022 when most of the companies called them back to their office and started working offline, ‘Taty Software Ltd.’ still asked their employees to work from home. Because of this, employees of “Taty Software Ltd.” were feeling bored, hence for recreation they formed a cricket-club. They started meeting every Saturday and Sunday on a ground near their office building. |
- Identify and state the type of organisation formed by the employees of 'taty Software Ltd.
- Also, state any two advantages and two limitations of the type of organisation identified in (i) above.
The organisational structure and the composition of the board of directors, are one of the internal factors of micro environment of a business organisation.
