TABLE OF CONTENT

NO.

TITLE

PAGES

1.

CHARACTERISTICS

2-3

2.

MAIN DIAGRAM

3.

ADVANTAGES AND DISADVANTAGES

4.

CONCLUSION

5.

REFERENCES

DIVISIONAL ORGANIZATIONAL STRUCTURE

CHARACTERISTIC

The divisional organizational structure breaks the public, private or non-profit firm into a
series of semi-autonomous units. Each division has its own chief officer who is responsible for
the performance of the division. These division might be responsible for a product or service, a
geographical location, or a customer group. Each unit is equipped with its own resources to
function independently. The industry and business sector, the number of employees and the
objectives and desired control over the units can determine whether it is useful to implement a
divisional organizational structure for a company.

Three types of divisional organizational structure characteristic was the multi-divisional

structure breaks down according to product, market or geographic considerations. A company
that wants to focus on worldwide management with strong units in each geographic region might
use the geographic structure. A product structure is organized around developing a range of
products, such as multiple types of cars or home products. When the firm uses the market
structure, each division serves a different market, or type of customer.

For the strength of this type organizational is divisional structure strengthens the
company in different ways. The individual divisions of the company are independent financially
and that allows them to determine clear routes of accountability and responsibility. Financial
independence also creates cooperation among the divisions without competition. Different
specializations (divisions) help employees further develop their skills in their own area of
expertise. As each division is independent, it can respond quickly to external changes in the
business environment without affecting divisions of the company.

There also a weakness behind its strength which is each division is independent, all need
the same resources and functions that could have been shared among them. For example, all
divisions have their own marketing and human resources departments rather than centrally
functioning on the company level. Employees can feel more affiliated toward their own division
and not toward the company and its mission. Technical employees can also feel separated from
their colleagues in other divisions, and that can lead to the lack of sharing about developments in
the same technical field.

DIAGRAM

ADVANTAGES
Divisions work well because they allow a team to focus upon a single product or service,
with a leadership structure that supports its major strategic objectives. Having its own president
or vice president makes it more likely the division will receive the resources it needs from the
company. Also, a division's focus allows it to build a common culture and esprit de corps that
contributes both to higher morale and a better knowledge of the division's portfolio. This is far
preferable to having its product or service dispersed among multiple departments through the
organization.
The divisional structure strengthens the company in different ways. The individual
divisions of the company are independent financially and that allows them to determine clear
routes of accountability and responsibility. Financial independence also creates cooperation
among the divisions without competition. Different specializations (divisions) help employees
further develop their skills in their own area of expertise. As each division is independent, it can
respond quickly to external changes in the business environment without affecting divisions of
the company.

DISADVANTAGES

The divisional organizational structure also can be prone to weaknesses. As each

division is independent, all need the same resources and functions that could have been shared
among them. For example, all divisions have their own marketing and human resources
departments rather than centrally functioning on the company level. Employees can feel more
affiliated toward their own division and not toward the company and its mission. Technical
employees can also feel separated from their colleagues in other divisions, and that can lead to
the lack of sharing about developments in the same technical field.

CONCLUSION

Large organizations that want the focus of a division could instead spin off into a freestanding subsidiary. Smaller organizations can work through major projects via dedicated
departments or ad-hoc cross-functional work teams
Each Divisions must be well managed. Executive leadership is the single most important
determinant of success for a company using a divisional structure. The top leaders need to
understand what each division is doing and provide leadership to the division chiefs on how to
accommodate new strategic directions or more effectively partner across divisions. In addition,
the executives should have a solid grasp of resource use. Having a shared pool of centrallymanaged resources like administrative support or office equipment can reduce costs and
organizational complexity.

REFERENCE

1) http://www.ehow.com/list_5886022_characteristics-divisional-organizationalstructure.html
2) http://smallbusiness.chron.com/characteristics-divisional-organizational-structure54774.html
3) https://www.boundless.com/management/textbooks/boundless-managementtextbook/organizational-structure-2/common-organizational-structures-25/divisionalstructure-147-3977/