Question

What are the benefits of divisional structure?

विकल्प

• Under divisional structure each head is responsible for the profit and loss of his own division

• As under divisional Structure, each division functions independently, decision making becomes quick

• Under divisional structure expansion of an organisation becomes easier as new divisions can be easily added without affecting the functioning of other divisions.

• All of the above

Answer 1

All of the above

Explanation - 

The following are the advantages that a divisional structure would provide to the company.

1. Each divisional leader is responsible for the profit and loss of his own division under the divisional system. This aids in the distinct identification of each department's performance. It becomes easy to judge each department's actions once the head is held accountable for its revenues and costs. This also aids in the implementation of corrective steps in the event of unsatisfactory performance.
2. Because each division operates independently under the divisional system, decision-making is expedited. The leaders of the departments have the authority to make their own decisions once the departments have been divided.
3. Expanding an organisation using a divisional structure is easier since new divisions may be introduced without disrupting the functioning of existing divisions.