1. Divisional Structure

2. Divisional Structure
Divisional structure is usually followed by big companies
which manufacture more than one products or having
operations in wide geographical area.
The organization is classified into different autonomous
units and Managers create a series of business units to
produce a specific kind of product for a specific kind of
customer

4. Types of Divisional Structures
Product Divisionalisation
Managers place each distinct product line or business in
its own self-contained division
 Divisional managers have the responsibility for devising
an appropriate business-level strategy to allow the
division to compete effectively in its industry
Each division looks after production, sales, finance,
Personnel of one product.

5. Product Structure
Washing Machine
Division
CEO
Corporation
Lighting
Division
Television
Division
Corporate
Managers

6. Territorial Divisionalisation
This is a structure for huge companies functioning
in different territories, such offices may have
zonal offices and below them regional offices. this
structure is followed by railways , Banks,
Insurance companies , Transport companies etc.

7. Territorial Structure
Northern
Region
Corporation
Western
Region
Southern
Region
Eastern
Region
CEO
Corporate
Managers

8. Advantages of Divisional Structure
• Each division can work as an independent unit
• Each division gets adequate freedom
• Division managers become experts in their area
• Removes need for direct supervision of division by
corporate managers
• Divisional management improves the use of
resources
• Timely and effective decisions can be taken

9. Disadvantages of Divisional structure
• This structure is not suitable for small organization
• Duplication of activities may happen in different
divisions
• When each division is engaged in independent
service cost may increase
• Head quarters find it difficult to control each division
• When each Divisional manager safeguards his
interest alone, he ignores the common goal of the
organization

10. Difference between Functional
Structure and Divisional Structure
Basis
Nature
Structure
Authority
Functional Structure
Focuses on functional departments
like production, finance, marketing,
etc.
Simple
Centralized authority
Divisional structure
Focuses on product or regional
level
Complex
Decentralised

11. Control
Operational freedom
Responsibility
Suitability
Easy
Less freedom
All department have
collective responsibility
Suitable for small
organization
Difficult
More Freedom
Each division has
separate responsibility
Suitable for Big
organization

12. THANK YOU