Meaning of Divisional Structure: It refers to the division of the whole enterprise according to the major products to be manufactured by it. Advantages of Divisional Organisation:
The following are the advantages of divisional organisation structure:
1. Development of Divisional Heads: The head of each division looks after all the functions connected with their product, that is, purchase, sale, advertisement, production, finance, etc. It helps in the development of varied skills in a divisional head.
2. Divisional Results can be Answered: All the activities of each division are carried out independently. Hence, the divisional results (profit/loss) can be assessed easily. On this basis, an unprofitable division can be closed.
3. Quick Decision Making: Every division is independent in itself. The divisional manager can take any decision regarding his division independently without consulting other divisional managers. Hence, decisions are quick and effective.
4. Easy Expansion: For every product a separate division is opened. If a company wants to introduce a new product, it can be introduced easily without disturbing the existing division. Hence, it is easy to expand to concern.
