Question

Discuss the merits of divisional structure.

Answer 1

1. Departmental coordination issues can be lessened with product departmentation. Every action pertaining to a specific product line is coordinated.
2. It allows for product diversity and expansion by giving each product line individualised attention.
3. It results in the specialisation of human talent and physical infrastructure.
4. It is simple to assess each division's performance and how it contributes to the overall outcomes. Divisional heads can be held accountable for the divisions' performance.
5. It makes development and expansion easier because new divisions can be introduced without affecting ongoing business operations.
6. Because each product division has distinct tasks and is somewhat autonomous, divisional structure aids in the development of a wide range of talents needed for top management roles.
7. It is more change-adaptable and flexible. Because each division operates as a somewhat independent entity, decisions are made more quickly and efficiently. It encourages initiative.