Which of the following is disadvantage of divisional structure?

A) Leads to occupational specialisation
B) Lead to problems in coordination as information has to be exchanged across functionally differentiated departments
C) Conflict may arise among different divisions with reference to allocation of funds
D) Lead to increase in costs since there may be a duplication of activities across products
E) Lead to inflexibility as people with same skills and knowledge base may develop a narrow perspective
F) Ignore organisational interest

Choose the correct answer from the options given below.

C, D & F

The correct answer is option 4- C, D & F

A) Leads to occupational specialisation- Advantage of functional structure.

B) Lead to problems in coordination as information has to be exchanged across functionally differentiated departments- Disadvantage of functional structure.

C) Conflict may arise among different divisions with reference to allocation of funds- Disadvantage of divisional structure.

D) Lead to increase in costs since there may be a duplication of activities across products- Disadvantage of divisional structure.

E) Lead to inflexibility as people with same skills and knowledge base may develop a narrow perspective- Disadvantage of functional structure.

F) Ignore organisational interest - Disadvantage of divisional structure.

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. The divisional structure has certain disadvantages. Some of them are as follows:

(a) Conflict may arise among different divisions with reference to allocation of funds and further a particular division may seek to maximise its profits at the cost of other divisions.

(b) It may lead to increase in costs since there may be a duplication of activities across products. Providing each division with separate set of similar functions increases expenditure.

(c) It provides managers with the authority to supervise all activities related to a particular division. In course of time, such a manager may gain power and in a bid to assert his independence may ignore organisational interests.