Divisional structures

6 important questions on Divisional structures

What is the difference between a functional structure and a divisional structure?

Functional structure groups people that have the same expertise or use the same resources.

Divisional structure groups people based on demands for specific products, markets or customers.

What is a product structure?

A divisional structure in which products are divided into several divisions according to their similarities
  • Ex. IKEA; Sofas, tables, chairs

What is corporate headquarters staff?

Mangers that are overseeing the activities of the divisional managers and help the division share information and learn from each other.
-> Has an integrating role.
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When can a product division structure and a multidivisional structure be used?

Product division: For companies operating in one business or industry.

Multidivisional: Design allows company to operate in many different businesses. Every division is a different business.

What is the geographic divisional structure?

When the problem is not different and complex products like in the multidivisional structure but a matter of different locations, a company can divide the different locations into divisions.

What is the market structure?

In a market structure marketing determines how to group organisational activities into divisions.
Each division has different marketing focus and develop products that suit the needs of its specific customers.

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