A cosmetic firm has been in personal care business for the past 30 years. Now the firm wants to diversify its operations across India by venturing into the garment and footwear segments. The organizational structure suitable in this case would be:

Divisional structure

The correct answer is option 3- Divisional structure.

Divisional structure is suitable in the given case.

The firm is diversifying into new product lines (garments and footwear), in addition to its existing personal care business. Each of these product segments will likely need its own Marketing strategies, Production processes, Sales teams, Budgets. This makes a divisional structure ideal, where each division (like personal care, garments, footwear) operates as a separate unit under the same overall management.

In a divisional structure, the organisation structure comprises of separate business units or divisions. Each unit has a divisional manager responsible for performance and who has authority over the unit.
Divisional structure is suitable for those business enterprises where a large variety of products are manufactured using different productive resources. When an organization grows and needs to add more employees, create more departments and introduce new levels of management, it will decide to adopt a divisional structure.