Bangladesh Public Administration Training Centre

Savar, Dhaka.
Programme & Studies Division Seal
Evaluation Department
71st Foundation Training Course
IA/IR/IE/IRP/ICS/IIR/OOVR

NAME OF THE COURSE : 71st FTC MODULE NO:06

NAME OF THE MODULE : Organization and Human Resource Management DATE:03.01.2021

Code No. …………………

………………...……………………………………………………………………………………………

Code No. …………………

Bangladesh Public Administration Training Centre

Savar, Dhaka.
Programme & Studies Division
Seal
Evaluation Department

71st Foundation Training Course

IA/IR/IE/IRP/ICS/IIR/OOVR

NAME OF THE COURSE : 71st FTC MODULE NO:06

NAME OF THE MODULE : Organization and Human Resource Management DATE:03.01.2021

Institution: BPATC/ BARD/ BIAM (DHAKA)/ BIAM (BOGURA)/ BCSAA/ RDA/CTGRPATC

Instruction to be followed
(Please read carefully)
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1. Put tick (✓) marks on Evaluation method and Institute’s Name.

Name ………A.N.M. ASHIQ BILLAH…………………………………………………………..

Roll No...……C-306……………….
 Bangladesh Public Administration Training Centre
Savar, Dhaka.

Programme & Studies Division

Evaluation Department

WE/OBE/IA/IR/IE/IRP/ICS/IIR/OOVR/Comprehensive

NAME OF THE MODULE : Organization and Human Resource Management

MODULE NO : 06

Table of Marks
Question No Marks Allotted Marks Obtained
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10
Total

Please fill in the table of marks properly.

Name & Signature of the Module Director

 SCENARIOES WHERE DIVISIONAL STRUCTURE IS
BETTER THAN FUCNTIONAL STRUCTURE

Contents
CONCEPTUAL DIFFERENCE OF FUNCTIONAL AND DIVISIONAL STRUCTURE..................2
TRANSFORMATION TO DIVISIONAL FORM FROM FUNCTIONAL: HISTORICAL
SCENARIO...................................................................................................................................................3
WHERE SIZE OF THE CORPORATION IS BIG..................................................................................3
LARGE DEPARTMENTS WITH LARGE TERRITORIES..................................................................4
COMPANIES WITH ACROSS COUNTRIES PRODUCTION.............................................................4
MULTIPLE PRODUCTS UNDER ONE UMBRELLA...........................................................................4
SCENARIO: WHERE RAPID RESPONSE IS NEEDED.......................................................................5
SCENARIO: WHEN SPECIALIZATION IS OF PRIME IMPORTANCE..........................................5
WHEN COLLABORATION BETWEEN SPECIALISTS IS THE KEY...............................................6
SCENARIO: IF PRODUCT IS VULNERABLE TO EXTERNAL CHANGES....................................6
SCENARIO: WHEN LEADERSHIP NEEDS TO GROW......................................................................6
SCENARIO: IN A COMPETITIVE MARKET........................................................................................6
WHEN PROMOTING AUTONOMY IS NECESSARY..........................................................................7
CONCLUSION.............................................................................................................................................7
CONCEPTUAL DIFFERENCE OF FUNCTIONAL AND DIVISIONAL
STRUCTURE
Functional and divisional formation of companies are two types of organogram that they can follow. In
functional organization, the structure is divided based upon functional criteria. Each of this functional unit
has a departmental head.

(templates/functional-org-chart_title, 2021)

Divisional structure is a kind of arrangement or formation where procedures are acted upon divisions or
distinct manufactured items/products groupings. In this formation distinct functions such as Manufacture
or finance can be maintained under each division to provide backing each product or manufactured items.
(Difference Between Functional and Divisional Structure | Compare the Difference Between Similar
Terms, 2021)

2|Page
(templates/functional-org-chart_title, 2021)

All those scenarios where divisional structure is better option than functions is described below:

TRANSFORMATION TO DIVISIONAL FORM FROM FUNCTIONAL:

HISTORICAL SCENARIO
After World War II, as companies extended their operation of manufacturing products and broadened their
horizon, lots of them comprehended a shift from functional structure to product line.

Example: Many business giants such as Du Pont, Sears, Standard Oil of New Jersey grew, General Motors
realized that it is now realistic to operate their activities in line of product divisions. (Chandler, 1962)
(Organizational Choice: Product vs. Function, 2021)

WHERE SIZE OF THE CORPORATION IS BIG

Product base is a vital component or criteria when it comes to departmentalizing. This one allows an all-out
use of individual expertise and veteran know-how. (D. Koontz and O’Donnell, 1959). Large corporations
operates in divisional structure. They systemize smaller special-purpose groups, each dedicated to a
precise product or service or even customer and area base.

Example: Gap Inc. has three different venders – Banana Republic, Gap, and Old Navy. Although each
one functions as a distinct entity that supplies to different customer sections, all of them fall under the
Gap Inc.

3|Page
brand. (Examples of Organizations Using Divisional Structure | Ifioque, 2021)

LARGE DEPARTMENTS WITH LARGE TERRITORIES

Divisional structure is frequently seen in corporations with huge numbers of subdivisions, markets or
zones.

Example: A food corporation may function on a divisional construction, aimed at providing each of their
food items or line can total autonomy. Functional organogram is not suitable in this type of companies as
departments are scattered all over the areas.

COMPANIES WITH ACROSS COUNTRIES PRODUCTION

Multinational corporations have extended their businesses to ensure coverage all the areas in the world.
We have seen Unilever and Nestle taking such type of actions. They have manufacturing industries in
many nations for production as well as retailing in those areas. Because of the large bulk of production, it
is not convenient to manufacture every products in the same location and dispense to different states like
in functional structure. For such companies, they have limited option. Therefore they inclined to
implement a divisional configuration.

MULTIPLE PRODUCTS UNDER ONE UMBRELLA

Functional hierarchy incline to be operative when a company does not own a huge quantity of products.
When a corporation operates in miscellaneous product items, each one will produce exclusive needs,
making divisional formation further convenient for punctually meeting customer needs, unlike functional
one.

Example: General Electric owns plentiful companies, products, and resources across various industries.
Although GE is the umbrella conglomerate, each division works as a separate firm. (Types of
Organizations - Overview, List, Examples, and Main Types, 2021)

4|Page
This type of structure is perfect for organizations with several products. (Common Organizational
Structures | Principles of Management, 2021).

Example: With numerous products, Johnson & Johnson assemblies themselves so each business entity
functions as its personal one with its own head of the company. (How Organizational Structures Work,
2021)

SCENARIO: WHERE RAPID RESPONSE IS NEEDED

When a corporation is designed in a divisional format, each partition of the business falls in number.
Therefore, it can be useful as the reduced subsections inside the business can sometimes tend customer
requirements more swiftly. (Advantages & Disadvantages of Divisional Organization, 2021)

SCENARIO: WHEN SPECIALIZATION IS OF PRIME IMPORTANCE

Usually, divisional organizations are allocated into subdivisions of employees who have expertise in
every products presented by an enterprise. Due of this reason, the workers in every section tend to be
more dedicated and skillful in those specific sectors.

5|Page
Example: Suppose in an advertising company, department of radio advertising would be experienced in
the art of radio ads, which makes them suitable to meet buyer demands. Contrariwise, in a functional
format all employees ought to hold a minimal idea of familiarity about everything, dropping employee’s
total efficacy. (Advantages & Disadvantages of Divisional Organization, 2021)

WHEN COLLABORATION BETWEEN SPECIALISTS IS THE KEY

Managers make variations that yield unexpected outcomes and consequently decrease the efficiency of those
organization.
Example: A producer of containers transformed from a product line to a functional one to advance control
of production costs and productivities. However, it discovered that they are not as much able to acquire
coordination midst its local trades and manufacturing units. The functional experts became liable to the top
management in charge of manufacture and sales. There was no system for anyone to synchronize his or her
task under the level of divisional administration. Consequently, the company faced several problems and
then resumed to the product line. (Organizational Choice: Product vs. Function, 2021)

SCENARIO: IF PRODUCT IS VULNERABLE TO EXTERNAL CHANGES

Functional structures are better suited in steady settings that are unlikely to change. On the contrary,
organizations that uses product divisions are swifter and can accomplish better in unsettled environments
like change of price, customer, declining economy etc. (Hollenbeck, et. al., 2002).

SCENARIO: WHEN LEADERSHIP NEEDS TO GROW

In the divisional format, leader fixes objectives along with his workers. The direct regulation from the top
management of the firm is absent here.  Leaders become professionals in their line of work. (Divisional
Structure: Examples, Advantages & Disadvantages, 2021)

SCENARIO: IN A COMPETITIVE MARKET

The divisional format functions better in situations if there exists a great degree of rivalries, where local
managers can rapidly change the course of their businesses to react to changes in that environmetal
circumstances. (Bragg and Bragg, 2021)

6|Page
WHEN PROMOTING AUTONOMY IS NECESSARY
McDonald’s Corporation is divided into sections who have specific responsibilities depending on
operational needs. Each division deals with a precise operational side. The purpose of this assembly is to
upkeep self-governance as well as organizational elasticity to sustain business requirements in diverse
structural features and market. (McDonald’s Organizational Structure & Its Characteristics - An Analysis
- Panmore Institute, 2021)

CONCLUSION
Divisional structure is more suitable option than functional one in case of the above-mentioned situations.
In short, we can summarize that because of large number of products, scattered geographical spots,
diversified line of products and varieties customer needs, divisional structure is by far better choice than
functional or any other structure.

7|Page
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