Question:
'Deccan Motors Ltd.' is a renowned name in the automobile sector in India. It deals in both commercial vehicles like bus, truck and lorries, as well as passenger vehicles like cars, scooters, etc. It presently has a functional organisational structure. The Board of Directors have now decided to shift to divisional structure, with separate divisions for commercial vehicles and passenger vehicles. Identify the benefit the company will get as a result of shifting to divisional structure:
'Deccan Motors Ltd.' is a renowned name in the automobile sector in India. It deals in both commercial vehicles like bus, truck and lorries, as well as passenger vehicles like cars, scooters, etc. It presently has a functional organisational structure. The Board of Directors have now decided to shift to divisional structure, with separate divisions for commercial vehicles and passenger vehicles. Identify the benefit the company will get as a result of shifting to divisional structure:
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Remember: Functional Structure = Occupational Specialization. Divisional Structure = Product Specialization & Autonomy.
Updated On: Jun 25, 2026
- It will promote flexibility and initiative because each division will function as an autonomous unit.
- It will lead to minimal duplication of effort, which will result in economies of scale.
- It will make training of employees easier as the focus will be on limited range of skills.
- It will lead to occupational specialisation since emphasis will be placed on specific functions.
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The Correct Option is A
Solution and Explanation
Step 1: Concept
Advantages of Divisional Structure.
Step 2: Meaning
A divisional structure groups activities based on product lines. Each division operates almost like an independent business unit with its own functional departments.
Step 3: Analysis
• Options (B), (C), and (D) detail the benefits of a functional structure (e.g., economies of scale, occupational specialization, and easier training due to narrow skill focus).
• Option (A) highlights the core advantage of a divisional structure: because each product division acts autonomously, division heads have the freedom to take initiative and adapt flexibly to their specific market.
Step 4: Conclusion
Shifting to a divisional structure will allow Deccan Motors to grant autonomy to its commercial and passenger vehicle divisions, promoting flexibility.
Final Answer: (A)
Advantages of Divisional Structure.
Step 2: Meaning
A divisional structure groups activities based on product lines. Each division operates almost like an independent business unit with its own functional departments.
Step 3: Analysis
• Options (B), (C), and (D) detail the benefits of a functional structure (e.g., economies of scale, occupational specialization, and easier training due to narrow skill focus).
• Option (A) highlights the core advantage of a divisional structure: because each product division acts autonomously, division heads have the freedom to take initiative and adapt flexibly to their specific market.
Step 4: Conclusion
Shifting to a divisional structure will allow Deccan Motors to grant autonomy to its commercial and passenger vehicle divisions, promoting flexibility.
Final Answer: (A)
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