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

Restructuring, What is the difference between restructuring, Reengineering ...

What is the difference between restructuring, Reengineering and Development

Portfolio analysis, In portfolio analysis, the business views its product l...

In portfolio analysis, the business views its product lines and business units as separate investments, each responsible for producing a positive return. These separate investments

Prepare a brief on decision making, Question 1 "Use anger correctly and...

Question 1 "Use anger correctly and improvements will happen!" To what extent this statement is true? Question 2 Company "Great Success" wishes to train its staffs o

Open group architecture framework, Discuss the following quotation and ...

Discuss the following quotation and please provide examples. Enterprise Architecture is an organising logic for managing change within an Information Systems environ

Explain developing a strategic vision, Developing a Strategic Vision: Phase...

Developing a Strategic Vision: Phase 1 of the Strategy Executing, Strategy Making Process 1.   Very early in the strategy making process, a company's higher-ranking managers mu

Examples of staff control in the workplace, Employee behavioural controls  ...

Employee behavioural controls  'Influencing the process of how staff work and behave'. Reward e.g. based on attitude or behaviour Dress code e.g. to ensure staff u

Balanced scorecard, Present five arguments to justify why Chemical’s retail...

Present five arguments to justify why Chemical’s retail bank, a financial institution with the bulk of its inputs and outputs denominated in financial terms, needs measures other t

The strategies of the functional areas of an organisation, Discuss the ways...

Discuss the ways in which the strategies of the functional areas of an organisation should support the other levels of strategy. In describing how the functional strategies sup

A prolific author, Dr. Allen Roth, a prolific author, is considering initia...

Dr. Allen Roth, a prolific author, is considering initiallising her own publishing company.  He will call it STC Publishing, Inc.  STC estimated costs are: Fixed Cost    =    $25,0

Managing value based management, Q. Managing value based management? ...

Q. Managing value based management? Strategic selection of projects that create high shareholder wealth. Resource allocation and funding should have a recognised oppor

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