Question

A company compried of competing divisions, allows its top management to frame policies or sound strategic thinking on various aspects like allocation of resources funds, etc. In the light of above statement, state the disadvantages fo divisional structure.

Answer 1

The disadvantages of divisional structure are as follows:
(i) There is duplication of physical facilities and functions.
(ii) Conflics may arise between divisions on allocation of resources and funds.
(iii) Greater autonomy to divisional heads may lead to misuse of authority.