Divisional Structure: Advantages and disadvantages

 Divisional Structure 

When the jobs related to one product are group under one department then it is termed as divisional structure this type of structure is suitable for large organisation which have various product lines or several product in simple terms to have divisional structure company must have more than one product. 

It allows for greater flexibility and responsiveness to local markets, as each division can tailor its products and services to meet the specific needs of its customers. It also allows for better coordination and communication between different parts of the organization, as each division has its own management team and can make decisions more quickly.

Yet, because each division may have its own support services like HR, finance, and marketing, the divisional structure can also result in duplication of work and resources. It can also lead to silos and a lack of cooperation between various departments, which can stifle innovation and reduce chances for mutual learning and development.

Advantages of Divisional Structure 

Product Specialization 

Under divisional structure the job related to common product are kept and performed  repeatedly which leads to product Specialization. 

Accountability 

Under divisional structure there is no interdependent or interlink between two departments as each department treated as profit Centre so it easy to fix the answer ability for a particular department.

Fast decision making 

Under business structure there is no interling or interdependent between two departments for the decision can be taken easily according to the requirement.

Expansion and Growth 

Under divisional structure jobs related common product are kept in a particular department which create different department section a division so new departments can be be added without disturbing or hampering any existing departments.

Disadvantages of Divisional Structure 

Involve huge cost

Under divisional structure is department required their resources department working independently so it is costly process

Conflicts 

Under divisional structure each departments work independently. So there can be chances of conflicts on allocation of resources. 

Ignore organisational interest 

Under divisional structure is department focuses on their product only and they fail to keep themself as a part of a common organisation.

Suitability 

• Organisations producing multiple product or different line of product. 
• Organisations require product specialization.
• Organisation required each division to be self contained other departments. 
• Organisation which plan to add more line of product in future.