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Question
A company, which manufactures a popular brand of toys, has been enjoying good market reputation. It has a functional organisational structure with separate departments for Production, Marketing, Finance, Human Resources and Research and Development. Lately to use its brand name and also to cash on to new business opportunities it is thinking to diversify into manufacture of new range of electronic toys for which a new market is emerging. Which organisation structure should be adopted in this situation? Give concrete reasons with regard to benefits the company will derive from the steps it should take.
Solution
The organisation should shift from functional structure to divisional structure as it is looking to diversify into manufacture new range of toys.
The benefits will be as follows:-
• The performance will be easily accessed.
• Easy Decision making.
• New electronic toys will be added without disturbing the previous toys.
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