Question

Choose the statement that correctly highlights the advantage of Divisional Structure :

• A. It facilitates expansion and growth, as new divisions can be added without interrupting the existing operations.
• B. It helps in increasing managerial and operational efficiency, resulting in increased profit.
• C. It makes training of employees easier, as the focus is on a limited range of skills.
• D. It promotes control and coordination within a department because of similarity in the tasks being performed.

Hint:

Ease of adding new divisions without disturbing the old ones is a divisional advantage. The other three options are advantages of functional structure.

Answer 1

The Correct Option is A

Step 1: Recall the divisional structure:
In a divisional structure the firm is split into product based divisions. Each division is a self-contained unit with its own head and functions.
We must pick the statement that is an advantage of this structure.

Step 2: Why option (A) is right:
Since each division works on its own, a new division can be added for a new product line without disturbing the existing operations. Only another divisional head and staff are added.
This facilitates expansion and growth, so option (A) is correct.

Step 3: Why the other options are wrong:
(B) Increased managerial and operational efficiency resulting in more profit is a claim for the functional structure, where specialisation raises efficiency.
(C) Easier training because of a limited range of skills is also for the functional structure. A division needs a wide range of skills.
(D) Control and coordination within a department due to similar tasks is again an advantage of the functional structure. A division contains many different functions.

Final Answer:
Ease of expansion and growth is an advantage of divisional structure. Option (A).