Disadvantages of divisional structures, Strategic Management

Assignment Help:

Q. Disadvantages of divisional structures?

- As the complexity and diversity of products and markets within the group increase, central coordination by a head office or holding company becomes more difficult.  This requires more resources and cost e.g. administration staff, head office buildings and information systems in order to maintain increasing complexity of activities.

- Duplication of functions (or departments) within each division e.g. each division having an IT or finance department, could lose the benefits economies of scale, therefore increasing group overhead.

- Reluctance by senior management at head office to give more delegated or decentralised control therefore reducing effectiveness of the divisions management e.g. slowing down decision making and flexibility.

- Lack of goal congruence or possible  "sub-optimal" decisions made by divisional managers at tactical level e.g. following personal as opposed to corporate objectives and aims.

- Other added complications to deal with such as transfer pricing issues or inter-divisional rivalry harming group performance.


Related Discussions:- Disadvantages of divisional structures

Technique to strategic management, A new technique to strategic management ...

A new technique to strategic management was developed in early 1990's by Drs. Robert Kaplan (Harvard Business School) and David Norton. Kaplan and Norton explain the innovation of

Show the advantages of reward systems, Q. Show the Advantages of reward sys...

Q. Show the Advantages of reward systems? ¸  Motivation can be heightened e.g. performance enhanced if paid by results. ¸ can inspire creativity e.g. bonuses paid for staff

Explain operating profit margin - performance ratios, Q. Explain Operating ...

Q. Explain Operating profit margin - performance ratios? Operating profit mar =              (PBIT / Turnover) x 100% This is the ratio of operating profit to sales or turno

Diffusion is, The amount and pace of market adoption.

The amount and pace of market adoption.

Advantages and disadvantages of process, Advantages and disadvantages 1...

Advantages and disadvantages 1. Advantages There are some benefits that Aldi can get from short term objectives such as allow development or small format supermarkets in edg

Define managerial process of crafting & executing strategy, Define Manageri...

Define Managerial Process of Crafting & Executing Strategy the managerial ins & outs of crafting & executing company strategies. Special thought is given to management's direc

Infrastructure changed to accommodate the industry, This introduction of te...

This introduction of technology (for example, the Internet/mobile technology/software) has eliminated some industries and has significantly impacted/threatened several others. Howe

Effect of globalization in management of an organization, The following ess...

The following essay will discuss how the popular trend of globalization is affecting the communication style and management of an organization. There will be explanations provided

Caselet, caselet in strategic management :National Competitive Advantage of...

caselet in strategic management :National Competitive Advantage of IKEA Group, a Swedish company founded in 1943 with its headquarters in Denmark, is a multinational operator of a

Designing stakeholders evaluation policies, 1. What stakeholders would you ...

1. What stakeholders would you have in the designing of the teacher evaluation policies? 2. What would be inclusive in a teacher evaluation process? (be very specific) 3. When

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd