Question

Six Mark Question:
A company is manufacturing Televisions, Refrigerators, Air-conditioners, Washing' machines and Gas stoves using different productive resources and is at the threshold of growth, requiring more employees.
Suggest a suitable organisational structure for this company giving reason in support of your answer. Also explain any three advantages and two limitations of this structure of organising.

Answer 1

Divisional structure Under the divisional structure an organisation is divided into different divisions or units on the basis of products or geographical area.

Advantages of divisional structure are:

Decisions are taken much faster in divisional structure.

It facilitates expansion and growth as new divisions can be added without interrupting the existing operations.

It leads to specialisation of physical facilities and human talent.

Disadvantages of divisional structure are:

There is a duplication of physical facilities and functions.

It suffers from the under utillisation of plan capacity.

Conflict may arise between different divisions on allocation of funds and other resources.