Divisional structures are structures organized according to the principle of separating large independent divisions with the transfer of functions of operational management and responsibility for profitability to them. Of the structures of the hierarchical type, divisional ones are considered the most
productive.
Divisional structures of company management
In connection with the expansion of the profile or the increase in the company, the complication of technological processes at the enterprise, it becomes more difficult for the manager to make operational decisions in certain areas. This is the reason for the emergence of divisional structures, where heads of departments and top managers who are directly related to production occupy an important place in the management of the company.
They are delegated a significant number of powers, given independence in decisions related to the development, production and sale of products, as well as responsibility for making a profit. The company's development strategy, financial policy, investment issues remain with the top management of the company.
Structuring criteria
A multi-divisional organization is typical for enterprises where different links are responsible for product release and marketing. Consumer specialization focuses on certain groups of consumers, while regional specialization focuses on the territories served. The market structure is used by companies with a wide range of products and numerous markets or consumer groups.
The global product structure produces a large number of product groups and sells them to different regions. The global regional structure divides economic objects according to regional characteristics, and also helps to solve problems associated with regional legislation, customs and needs of the population of the region.
Divisional structure advantages
The divisional structure is capable of managing diversified companies, geographically remote divisions. Has flexibility and quick reaction to any changes in the company, makes prompt decisions on production issues of the division. With the growth of the structure's independence, its activity, work efficiency, quality and profit increase. A strong connection between production and consumers has been established.
Disadvantages of divisional structure
There is a need to create a large management vertical, which requires additional costs for maintaining the management structure. Due to the remoteness, there is a disunity of the structure and insufficient interaction of structures when solving issues in related divisions. The remoteness of the higher management of the organization from certain areas of activity is another disadvantage.
