Question

Which of the following is not a demerit of divisional structure?

Options

• It is an expensive structure to maintain, since there may be a duplication of activities across products.

• All functions related to a particular product are integrated in one department.

• Conflict may arise among different divisional heads due to different interests.

• Authority provided to the managers to supervise all activities related to a particular division may lead to undesirable consequences.

Answer 1

All functions related to a particular product are integrated in one department.

Explanation:

This is actually a merit of the divisional structure, not a demerit. Integrating all functions related to a product in one division improves coordination and accountability. The other options 1, 2, and 3 are true demerits of the divisional structure.