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Question
Answer the following question.
Voltage fluctuations have been common and quite high in India. They harm our electrical appliances like televisions, refrigerators, and air conditioners, often leaving them in a permanently damaged condition. N-Guard Company decided to manufacture stabilizers for North India where the voltage fluctuation ranges from 220 V to 230 V. Once the demand for North India was taken care of, they decided to launch stabilizers of varying voltages from 90 V – 260 V for meeting the requirements of voltage fluctuations in other regions of India also. Three engineers were appointed for South, West and East regions of India, as the voltage was different in all the three regions.
Though all the engineers were appointed to manufacture stabilizers but the product differed from region to region.
(a) Identify the organisational structure of the N-Guard Company.
(b) State any two advantages and two limitations of the structure identified in the above para.
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Solution
(a) The divisional structure is followed by the N-Guiard Company. N-Guard Company decided to appoint different engineers for all the regions. Though all the engineers were appointed to manufacture stabilizers the product differed from region to region. In the divisional structure, activities are grouped on the basis of products or services offered by the business.
(b)
The advantages of a divisional structure are:
(i) Managerial efficiency:
A divisional structure provides numerous opportunities for the development of skills and knowledge of the managers. The head of each division gains experience as he or she deals with a variety of functions simultaneously. This enables the division head to grow professionally and improve proficiency.
(ii) Measurement of performance:
In a divisional structure, the performance of each of the divisions is judged on the basis of its profit and loss during a particular period. This type of assessment of performance is easier and helps in taking appropriate and timely corrective action in case of poor performance.
The limitations of a divisional structure are :
(i) Departmental conflicts:
Sometimes conflicts may arise among different divisions with regard to various decisions and actions of the organisation such as those relating to the allocation of funds and resources.
(ii) Increase in cost:
As there exists a similar functional structure under each division, the same set of functions are performed under each department.
Thus, there is a high probability of overlapping of activities, which results in a rise in cost for the organisation.
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