Advantages and disadvantages of divisional structure

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:

  1. Each division can work as an independent unit.
  2. Each division gets adequate freedom.
  3. Division managers become experts in their area.
  4. Separation of strategics and operating control.
  5. Good training ground for strategic management.
  6. This structure can create career development chances.
  7. Remove the need for direct supervision of division by corporate managers.
  8. Timely and effective decisions can be taken.
  9. Retain function specialization within each division.
  10. Frees chief executive officer for border strategic decision making.
  11. Quicker response to change in the market environment.
  12. Quick decision making.
  13. Promote delegate of authority.
  14. It is a minimal problem sharing resources.
  15. Corrdinationand rapid response.
  16. Strategy development and implementation.
  17. Sharply focuses on accountability for performance.
  18. Allow easy adding of new product or region.
  19. Allow strict control and attention to products, customers, and/or regions.

Cons or disadvantages of divisional structure:

  1. This structure is not suitable for small organizations.
  2. Headquarters find it difficult to control each division.
  3. Duplication of activities may happen in different divisions.
  4. Can be very expensive, When each division is engaged in independent service cost may increase
  5. When each divisional manager safeguards his interest alone, he/she ignores the common goal of the organization.
  6. The conflict between the divisional head.
  7. Can focus on short term performance.
  8. The difference in image and quality may occur across the division.
  9. In this structure, every division tries to display better performance sometimes even at the cost of other divisions. This shows their selfish attitude.
  10. Require a skilled management force.
  11. Require an elaborate control system.
  12. In this structure, the competition among divisions can become so intense as to be dysfunctional.
  13. This structure can lead to limited sharing of ideas and resources.
  14. Some regions/products/customers may receive special treatment.


Explore more information:

  1. Advantages and Disadvantages of Functional Organizational Structure

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