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

Feed-forward control - prevention rather than cure, Q. Feed-forward control...

Q. Feed-forward control - prevention rather than cure? Feed-forward control would be a system that in a pre-emptive way, reacts to changes in its environment, normally to maint

Lukas manufacturing , Lukas Manufacturing is presently producing a tape hol...

Lukas Manufacturing is presently producing a tape holder that has a variable cost of $0.75 per unit and a selling price of $2.00 per unit.  Fixed costs are $20,000 a year.  Present

What is competitor myopia, Instant competition blinds a company to latent c...

Instant competition blinds a company to latent competitors who can demolish the old ways of doing business.

Managerial decision analysis, A transport company must collect and deliver ...

A transport company must collect and deliver loads from and to various locations along a straight road (call it the x -axis). The truck must start and end each day at the origin (t

Describe about interest cover, Q. Describe about Interest cover? Intere...

Q. Describe about Interest cover? Interest cover =   (Profit before interest and tax (PBIT)/ Interest payable)            (no. of times) Interest cover shows the safety of e

Networks vary from joint ventures in that network, Are arrangements whereby...

Are arrangements whereby two or more companies work in collaboration without formal relationships, where there is mutual benefit in doing so

Explain the function of the group, a.     Explain the function of the group...

a.     Explain the function of the group. b.     For each group, describe the following: 1)     How it came into being. 2)     How long it has existed (and is expected to

Coca-Cola vs Pepsi, How would you respond to Coca-Cola’s change in sales po...

How would you respond to Coca-Cola’s change in sales policy? How would you ensure Pepsi’s board that this response will allow you to remain competitive and profitable?

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