DIVISIONAL STRUCTURE

Divisional structures are popular among organizations with diverse operations cutting across many products, areas, and customers

Major Advantages Of Divisional Structure

Includes:

· greater flexibility in responding to environmental changes

· improved coordination across functional departments

· clear points of responsibility for product or service delivery

· expertise focused on specific customers, products and regions

· easier growth or reduction in size by adding or deleting divisions

Major Disadvantages Of Divisional Structure:

· May reduce economies of scale, disperse technical competence and expertise,

· Even create unhealthy rivalries among operating units.

· May also increase costs by duplicating resources and efforts across divisions and causing an overemphasis on divisional versus organizational goals.

Refer articles on Functional Organization Structure & Matrix Organization Structure