Some of the advantages and disadvantages of a Divisional organizational structure are as follows. Also, you can check out the advantages and disadvantages of organizational structure to know more about it.
Pros or advantages of divisional structure:
- Each division can work as an independent unit.
- Each division gets adequate freedom.
- Division managers become experts in their area.
- Separation of strategics and operating control.
- Good training ground for strategic management.
- This structure can create career development chances.
- Remove the need for direct supervision of division by corporate managers.
- Timely and effective decisions can be taken.
- Retain function specialization within each division.
- Frees chief executive officer for border strategic decision making.
- Quicker response to change in the market environment.
- Quick decision making.
- Promote delegate of authority.
- It is a minimal problem sharing resources.
- Corrdinationand rapid response.
- Strategy development and implementation.
- Sharply focuses on accountability for performance.
- Allow easy adding of new product or region.
- Allow strict control and attention to products, customers, and/or regions.
Cons or disadvantages of divisional structure:
- This structure is not suitable for small organizations.
- Headquarters find it difficult to control each division.
- Duplication of activities may happen in different divisions.
- Can be very expensive, When each division is engaged in independent service cost may increase
- When each divisional manager safeguards his interest alone, he/she ignores the common goal of the organization.
- The conflict between the divisional head.
- Can focus on short term performance.
- The difference in image and quality may occur across the division.
- In this structure, every division tries to display better performance sometimes even at the cost of other divisions. This shows their selfish attitude.
- Require a skilled management force.
- Require an elaborate control system.
- In this structure, the competition among divisions can become so intense as to be dysfunctional.
- This structure can lead to limited sharing of ideas and resources.
- Some regions/products/customers may receive special treatment.
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