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advantajes Each division can specialize and focus its efforts on its particular product, service or market and not be distracted by competing interests. also provides you a great deal of flexibility for the overall organization because each division operates separately and focuses on the most pressing issues facing it rather than being triaged by a central authority. In other words, the leader of each division can focus on the specific goals of his division and leave the overall strat
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  advantajes Each division can specialize and focus its efforts on its particular product, service or market and not be distracted by competing interests. also provides you a great deal of flexibility for the overall organization because each division operates separately and focuses on the most pressing issues facing it rather than being triaged by a central authority. In other words, the leader of each division can focus on the specific goals of his division and leave the overall strategic management of the company to the folks at the corporate headquarters. Disadvantajes (1) Conflicts between Divisional Heads:  Every divisional head wants to establish his supremacy. To satisfy ego each demands maximum resources for his division. This situation leads to conflicts among the various divisional heads. (2) Duplicity of Functions:  The entire set of functions (e.g., production, marketing, financial, personnel, etc.) is required for all divisions. It gives rise to duplicity of efforts among divisions. Hence, resources are misused and cost of operations is unnecessarily increased. (3egoista) Selfish Attitude:  Every division tries to display better performance sometimes even at the cost of other divisions. This shows their selfish attitude. Consequently, it hits the interest of the concern as a whole.  Three Types Units of a divisional organization can be defined on a product, customer or geographical  basis. For example, a company in the automobile industry can divide its organizational structure based on its specific products: SUV, sedan, coupe. Another option is to build the structure on customer types and define divisions as: elite, middle class, low-income customers. Or create geographical divisions for the company: North America, Europe, Asia.  A divisional structure has some clear advantages. First and perhaps foremost, accountability is clear. That   is, divisional managers can be held responsible for sales and profit levels. Because a divisional structure is   based on extensive delegation of authority, managers and employees can easily see the results of their good   or bad performances. As a result, employee morale is generally higher in a divisional structure than it is in   a centralized structure. Other advantages of the divisional design are that it creates career development   opportunities for managers, allows local control of local situations, leads to a competitive climate within an   organization, and allows new businesses and products to be added easily.   The divisional design is not without some limitations, however. Perhaps the most important limitation is   that a divisional structure is costly, for a number of reasons. First, each division requires functional   specialists who must be paid. Second, there exists some duplication of staff services, facilities, and   personnel; for instance, functional specialists are also needed centrally (at headquarters) to coordinate   divisional activities. Third, managers must be well qualified because the divisional design forces delegation   of authority; better-qualified individuals require higher salaries. A divisional structure can also be costly   because it requires an elaborate, headquarters-driven control system. Finally, certain regions, products, or    customers may sometimes receive special treatment, and it may be difficult to maintain consistent,   companywide practices. Nonetheless, for most large organizations and many small firms, the advantages   of a divisional structure more than offset the potential limitations.      Advantages of the Divisional Organization Structure   The key points in favor of the divisional structure involve placing decision making as close to the customer as possible. The advantages are:     Accountability. This approach makes it much easier to assign responsibility for actions and results. In particular, a division is run by its own management group, which looks out for the best interests of the division.    Competition.  The divisional structure works well in markets where there is a great deal of competition, where local managers can quickly shift the direction of their businesses to respond to changes in local conditions.    Culture . You can use this structure to create a culture at the divisional level that most closely meets the needs of the local market. For example, a retail division could have a culture specifically designed to increase the level of service to customers.    Local decisions . The divisional structure allows decision-making to be shifted downward in the organization, which may improve the company's ability to respond to local market conditions.    Multiple offerings . When a company has a large number of product offerings, or different markets that it services, and they are not similar, it makes more sense to adopt the divisional structure.    Speed  . This approach tends to yield faster responses to local market conditions. Disadvantages of the Divisional Organization Structure  The key points against the divisional structure involve the cost of duplicating functions and a reduced focus on the overall direction of the company. The disadvantages are:    Cost.  When you set up a complete set of functions within each division, there are likely to be more employees in total than would be the case if the business had instead been organized under a purely functional structure. Also, there must still be a corporate organization, which adds more overhead cost to the business.    Economies of scale . The company as a whole may not be able to take advantage of economies of scale, unless purchases are integrated across the entire organization.     Inefficiencies . When there are a number of functional areas spread among many divisions, no one functional area will be as efficient as would have been the case if there had instead been one central organization for each function.    Rivalries . The various divisions may have no incentive to work together, and may even work at cross-purposes, as some managers undercut the actions of other divisions in order to gain localized advantages.    Silos . All skills are compartmentalized by division, so it can be difficult to transfer skills or best practices across the organization. It is also more difficult to cross-sell products and services between the divisions.    Strategic focus . Each division will tend to have its own strategic direction, which may differ from the strategic direction of the company as a whole.
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