Read the following Case Study and answer, question

Aryan is a CEO of RS Infotech Ltd., which is a company working in the technology sector for the last 55 years. The company is doing very well in this sector and now has a growth plan of entering into cosmetics market.

Keeping in view the changing tastes and preferences Of customers, it is planning to enter organic products market.

The company targets to achieve 20% of market share in the first 2 years of its entry.

For financial issues, Aryan consulted his chief finance officer, Raj and found that it requires 50 crores of additional capital for setting up a separate cosmetics division.

The Company plans to arrange this money by issuing equity shares in the market but it lacks sufficient cash to bear the floatation cost and hence planned to approach the financial market for the same.

Identify the type of organisation structure required by RS Infotech.

Divisional Organisation Structure

The correct answer is option (4) : Divisional Organisation Structure

(4) Divisional Organization Structure.

A divisional organization structure is typically used when a company diversifies its operations into different product lines or markets. It involves the creation of semi-autonomous divisions within the company, each responsible for a specific product line or market segment. In this case, RS Infotech is planning to enter the cosmetics market, which represents a new and distinct product line from its existing technology sector. To manage the operations effectively and efficiently, it would be prudent for RS Infotech to adopt a divisional organizational structure, enabling the new cosmetics division to function independently with its own resources and management.