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- Divisional — This chart subdivides the company based on some specific criteria. It could be by product lines offered or geographic regions. An example would be an auto manufacturer organizing its company by product type. The respective divisions would have a certain autonomy but this would likely incur additional overhead cost.
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Dec 7, 2023 · What is the Divisional Organizational Structure? The divisional organizational structure organizes the activities of a business around geographical, market, or product and service groups.
Feb 15, 2023 · A divisional organizational structure is a system in which the business is divided into segments by product, market or geographies, whereas organizations are typically grouped by departments and job roles.
- Advantages & Disadvantages of Divisional Structures
- Geographical Structures
Advantages
1. If an organisation wants to grow and diversify, the functional structure cannot cope, so instead the divisional structure should be adopted. Should the company want to diversify further, it is easy to 'bolt on' another division. 2. It encourages growth and diversity of products, e.g. by adding additional flavours etc to capture other segments of the market. This in turn promotes the use of specialised equipment and facilities. 3. Due to the breakdown of the company's activities into the di...
Disadvantages
1. In most divisionalised companies, some functions, e.g. accounting or human resources will be provided centrally. If this is the case, the cost of the centralised function could be recharged to those divisions using e.g. the human resource function. There are different ways of calculating the recharge and divisional managers may complain if the profitability of their division is reduced by an amount that they perceive as being arbitrary.
Grouping activities on the basis of location.Common in organisations that operate over a wide geographic area.Often, some departments e.g. accounts will be centralised.For example Kaplan.Apr 1, 2024 · The divisional structure is an organizational structure that works by segmentation based on products, markets, or geographical variations. It is best suited for big companies, especially those dealing in multiple products to serve multiple markets.
Jul 12, 2024 · The divisional organizational structure is a type of organizational design that groups a company’s activities around products, services, customers, or geographic locations. Each division operates as a semi-autonomous entity, with its resources and objectives, yet remains aligned with the overarching goals of the organization.
Mar 26, 2024 · An organizational chart is a diagram that visually conveys a company's internal structure by detailing the roles, responsibilities, and relationships between...
Mar 10, 2023 · There are three main types of organizational chart structures: hierarchical, flat, and matrix. For each of these primary structures, there are different variations that reflect the specific operational needs of a company.
