Divisional management structure diagram. Divisional product structure

Currently, classical linear-functional structures are inherent only in small and part of medium-sized companies. They are rarely used at the level of transnational corporations, more often at the level of their divisions abroad. For large companies the divisional approach to the construction of organizational management structures has become dominant.

Divisional (departmental) management structures (from the English. division- branch, division of the company) are the most perfect kind of organizational structures of a hierarchical type, and even sometimes they are considered something in between bureaucratic (mechanistic) and adaptive structures. In some cases, these structures can be found in the literature under the name "fractional structures".

For the first time, divisional management structures appeared in the late 1920s at the enterprises of General Motors, and they became most widespread in the 60-70s of the XX century. According to some estimates, by the mid-1980s, 80% of all diversified and specialized

companies, including from the 500 largest - 95%. In Japan, this type of structure is used by 45% of all companies. Divisional structures arose as a reaction to the shortcomings of linear-functional structures. The need for their reorganization was caused by a sharp increase in the size of companies, the complexity of technological processes, diversification and internationalization of their activities. In a dynamically changing external environment, it was impossible to manage dissimilar or geographically distant divisions of the company from a single center.

Divisional structures - structures based on the allocation of large autonomous production and economic units (departments, divisions) and their corresponding levels of management with the provision of operational and production independence to these units and with the transfer of responsibility for making a profit to this level.

Under department (division) an organizational commodity-market unit that has the necessary internal functional units. The department is given responsibility for the production and marketing of certain products and profit, as a result of which the management staff of the company's upper echelon is released to solve problems. strategic objectives. The operational level of management, which focuses on the production of a specific product or on the implementation of activities in a certain territory, is separated from the strategic level, which is responsible for the growth and development of the company as a whole. As a rule, the top management of the company has no more than 4-6 centralized functional units. The supreme governing body of the company reserves the right to strictly control corporate issues of development strategy, research and development, finance, investment, etc.

Consequently, divisional structures are characterized by a combination of centralized strategic planning in the upper echelons of management and decentralized activities of departments at the level of which operational management is carried out and which are responsible for making a profit. In connection with the transfer of responsibility for profit to the level of departments (divisions), they began to be regarded as "profit centers", actively using the freedom granted to them to increase work efficiency. In this regard, divisional

Management structures are usually characterized as a combination of centralized coordination with decentralized management (decentralization while maintaining coordination and control) or, in accordance with A. Sloan's statement, as "coordinated decentralization".

The divisional approach provides a closer connection between production and consumers, significantly accelerating its response to changes occurring in external environment.

Divisional structures are characterized by the full responsibility of the heads of departments for the results of the activities of the departments they head. In this regard, the most important place in the management of companies with a divisional structure is occupied not by the heads of functional departments, but by the heads of production departments.

The structuring of the company by departments (divisions) is usually carried out according to one of three principles: by product - taking into account the characteristics of the products or services provided, depending on the focus on a particular consumer, and by regional - depending on the territories served. In this regard, three types of divisional structures are distinguished:

Divisionally productive;

Organizational, consumer-oriented;

Divisional-regional.

At divisional product structure authority to direct the production and marketing of any product or service is transferred to one manager who is responsible for this species products. Heads of functional services (Fig. 2.11) (production, supply, technical, accounting, marketing, etc.) must report to the manager for this product.

Companies with this structure are able to respond more quickly to changes in competitive conditions, technology and customer demand. Activities for the production of a certain type of product are under the leadership of one person, coordination of work is improving.

A possible disadvantage of the product structure is an increase in costs due to duplication of the same types of work for different types products. Each product department has its own functional divisions.

Rice. 2.11. Product divisional structure

While creating customer-oriented organizational structures, subdivisions are grouped around certain groups of consumers (for example, the army and civilian industries, products for industrial and technical and cultural purposes). The purpose of this organizational structure is to serve the needs of specific customers as well as a company that serves just one group of customers. An example of an organization that uses consumer-facing organizational governance structures is commercial banks. The main groups of consumers of services in this case will be: individuals, companies, other banks, international financial

organizations.

If the company's activities are spread over several regions that require the use of different strategies, then it is advisable to form a divisional management structure according to territorial principle, i.e., apply a divisional-regional structure (Fig. 2.12). All activities of the company in a particular region in this case should be subordinate to the appropriate manager, who is responsible for it to the highest governing body of the company. The divisional-regional structure facilitates the solution of problems associated with local customs, peculiarities of legislation and the socio-economic environment of the region. Territorial division with

| Country 4 | | Country 5 | | Region 6 |Rice. 2.12. Regional divisional structure

creates conditions for the training of managerial personnel of departments (divisions) directly on the spot.

With the development of companies, their entry into international markets, their gradual transformation from national corporations into transnational corporations, the achievement by transnational corporations of the highest level of their development - the creation of global corporations, divisional structures are transformed into international divisional, and then - into global ones. In this case, the company ceases to place the main bet on activities within the country, and restructures its structure in such a way that international operations were more important than operations in the national market.

The following most common varieties of international divisional structures can be distinguished, the construction of which is based on a global approach:

1. globally oriented product (commodity) structure(Worldwide Product Structure), based on a divisional structure with divisions on a product basis, each of which independently works for the entire world market (Fig. 2.13). Such a structure can be used by companies with highly diversified products, products that differ significantly in their production technology, marketing methods, distribution channels, etc. It is used primarily by those companies for which the differences between the types of products produced are more important than the differences between the geographical regions in which these products are sold. This kind

structures contributes to the international orientation of the company, however, it is typical (though, like any other type of divisional structures), the weakening of coordination between the individual divisions of the company; increased duplication of their activities.

Rice. 2.13. Globally oriented product [commodity] structure

2. Globally oriented regional structure (Worldwide Regional Structure), also based on a divisional structure, but using the geographical principle of construction (Fig. 2.14). At the same time, the national market is often considered only as one of the regional divisions. The most appropriate use of this type of structure by companies for which regional differences are more important than differences in products. Often, globally oriented regional organizational structures are used in industries with technologically slowly changing products (cars, drinks, cosmetics, food, oil products). The advantages of such a structure include a close relationship with geographic regions and high coordination of activities within them, and the disadvantages are poor coordination of the work of individual units and duplication of their activities.

Rice. 2.74. Globally Oriented Regional Structure

3. Mixed (hybrid) structure(Mixed Structure, Mixed Overlay), where, along with an emphasis on a specific product (geographical region, functions), structural links of territorial and functional (product and functional or territorial and product) types are built in. This type of structures arose due to the fact that each of the above structures can be noted strong and weak sides, there is not a single organizational structure that could be considered ideal. The organizational structure of management must correspond to the specific conditions of the company's functioning. In large objects, they are quite complex and diverse, and not a single one can be adequate for them. organizational structure in its purest form. The mixed structure is currently very popular among American multinational corporations (especially those with highly diversified activities).

We have described the use of divisional structures at the company level, but I would like to note that in the production departments (divisions) themselves, management, as a rule, is built on the basis of a linear-functional principle.

Summing up the consideration of divisional structures, we will especially emphasize their advantages, disadvantages and conditions for the most effective application. The advantages of this type of structures include:

the use of divisional structures allows the company to pay as much attention to a specific product, consumer or geographic region as a small specialized company pays, as a result of which it is possible to quickly respond to changes in the external environment, adapt to changing conditions; this type of management structure focuses on achieving the final results of the company's activities (production of specific types of products, meeting the needs of a particular consumer, saturation of a specific regional market with goods);

reducing the management complexity faced by managers top management;

separation of operational management from strategic, resulting in the top management of the company concentrates on strategic planning and management; transferring responsibility for profit to the level of divisions, decentralizing the adoption of operational management decisions, such a structure helps bring management closer to market problems; improved communications; development of breadth of thinking, flexibility of perception and entrepreneurial spirit of the heads of departments (divisions). At the same time, the shortcomings of the considered type of organizational structures should be emphasized:

divisional management structures led to the growth of hierarchy, i.e., the vertical of management. They demanded the formation of intermediate levels of management to coordinate the work of departments, groups, etc.;

contrasting the goals of departments with the general goals of the company's development, the discrepancy between the interests of the "tops" and "bottoms" in a multi-level hierarchy;

the possibility of interdepartmental conflicts, in particular, in the event of a shortage of centrally distributed key resources;

low coordination of the activities of departments (divisions), headquarters services are fragmented, horizontal ties are weakened;

inefficient use of resources, the inability to use them fully due to the assignment of resources to a specific unit;

Increase in the cost of maintaining the administrative apparatus
due to duplication of the same functions in subsection
and a corresponding increase in the number of people
la;

Difficulty in exercising control from top to bottom;

Multi-level hierarchy and within the departments themselves (divi
zions), the action in them of all the shortcomings of the linear function
onal structures;

Possible limitation of professional development of a specialist
lists of subdivisions, since their teams are not so
faces, as in the case of using linear-functional
structures at the company level.

It should be noted that the most effective use of divisional management structures under the following conditions:

In large companies, when expanding production
stvenny-economic operations;

Companies with a wide range of products
tions;

In companies with highly diversified
stvom;

In companies where production is weakly affected by
baniam market conditions and little dependent on technology
ical innovations;

With the intensive penetration of companies into foreign
markets, i.e. in companies operating
on a wide international scale, at the same time
how many markets in countries with different socioeconomic
cal systems and legislation.

4. Organizational structures based on strategic business units (strategic economic centers)(strategic business units, SBUs). This type of organizational structures is the most developed type of divisional management structures. They are used in companies if they have a large number of independent branches of a similar profile of activity. In this case, to coordinate their work, special intermediate management bodies are created, located between departments and top leader. These bodies are chaired by deputies of the top management of the organization (usually vice presidents) and are given the status of strategic business units.

Strategic business units are the organizational units of the company responsible for developing its

strategic positions in one or more areas of management. They are responsible for choosing a field of activity, developing competitive products and marketing strategies. Once the product range has been developed, the responsibility for implementing the program falls to the departments of the current commercial activities, i.e. for divisions.

The pioneer in the creation and use of organizational management structures, built on the basis of the allocation of strategic business units, was the General Electric Company, known for its innovative nature. In the second half of the 1970s, this company had about 200 branches and 43 strategic business units. In the future, many companies picked up this innovation.

A detailed analysis of the varieties of hierarchical organizational structures showed that the transition to more flexible, adaptive management structures, better adapted to dynamic changes and production requirements, was objectively necessary and logical.

Case for analysis REORGANIZATION PROJECT

Similar information.

Lecture: Organization as an object of management

Lecture: Organizational structures of management

Purpose of the lecture: present the main structures of management of organizations, highlight their positive and negative sides.

Under the organizational structure of management is understood the activity of the subject of management. It is individual and depends on the characteristics of the economic activity of the organization.

The organizational structure is a set of management links located in strict subordination and providing the relationship between the managing and managed subsystems.

In the management structure of the organization, elements such as:

links (departments);

management levels.

In the theory and practice of management, two large blocks of organizational structures have developed:

Bureaucratic organizational structures:

Linear.

Linear headquarters.

Functional.

Divisional.

Organic (adaptive) organizational structures:

Matrix.

Linear structure It is characterized by the fact that at the head of each structural unit there is one leader, endowed with all powers and exercising sole leadership of subordinate employees and concentrating all management functions in his hands.

At linear control each link and each subordinate has one leader through whom all management decisions pass through one channel. In this case, management links are responsible for the results of all activities of managed objects.

Since in a linear management structure decisions are passed down the chain "from top to bottom", and the head of the lower level of management is subordinate to the head of a higher level, a kind of hierarchy of heads of a particular organization is formed.

The linear control structure looks like this (figure):

Rice. Linear control structure

Advantages of a linear management structure:

A clear system of mutual relations between departments.

A clear system of unity of command, effective use of the central administrative apparatus.

Clear responsibility.

Quick response of performers to direct instructions from higher authorities.

Efficiency in decision-making at one level of management.

Simplicity organizational forms and clarity of relationship.

Minimum production costs.

The disadvantages of a linear control structure are:

A lot of time for the implementation of management decisions.

Small initiative at all levels.

Poor career opportunities for managers.

Low flexibility and adaptability in relation to the external environment.

A tendency to red tape and shifting problems when solving issues that require the participation of several departments.

The criteria for the efficiency and quality of the work of departments and the organization as a whole are different.

The tendency to formalize performance appraisal creates an atmosphere of fear and mistrust.

Increased dependence of work results on qualifications, business qualities managers.

Functional management structure characterized by the fact that functional management is carried out by a certain set of units specialized in the performance of specific types of work necessary for decision-making in the linear management system.

The idea of ​​the management structure is that the performance of individual functions on specific issues is entrusted to a group of specialists focused on the implementation certain types works.

In an organization, as a rule, specialists of the same profile are combined into structural units (departments), for example, the marketing department, planning department, accounting, logistics, etc. Thus, the overall task of managing the organization is divided, starting from the middle level, according to functional criteria.

Functional and line management exist together, which creates a double subordination of performers.

The functional structure of management is shown in the figure:

Rice. Functional management structure.

Benefits of a functional management structure:

Efficient management due to the high specialization of management personnel.

Good control over the implementation of strategic decisions.

Opportunity for career growth and development.

No duplication of linear and functional relationships.

Decreased information transit time.

Less management workload.

Disadvantages of a functional control system:

Difficulties in coordinating the activities of various departments.

Lengthy decision making process.

Loss of mutual understanding in actions between employees of functional services.

A high degree of interest in the implementation of the goals of functional units to the detriment of the overall goals of the organization.

Reducing responsibility due to lack of unity of command.

Linear - headquarters organizational structure is a linear-functional management structure, supplemented by a headquarters body.

Staff structures are created in the following cases:

liquidation of consequences or prevention of natural disasters, accidents, catastrophes;

development new products, new technology, not traditional for this enterprise;

solving a sudden extraordinary problem, for example, related to the aggressive behavior of competitors in the market and the need to develop a response.

The headquarters unit can be both temporary and permanent in nature and perform a consulting role in the formulation and implementation of a specific problem or task.

Linear - headquarters organizational structure is as follows (figure):

Rice. Linear-staff organizational structure.

The benefits of this governance structure include:

Detailed study of strategic and tactical issues.

Unloading (partial) senior management in the analysis of information and the development of proposals.

Opportunity to involve external experts and consultants.

Unloading functional units.

The disadvantages of line-staff management are:

Insufficiently clear division of responsibility, tk. external consultants are not responsible for the result of implementation of decisions.

Tendencies towards excessive centralization of management.

Other disadvantages inherent in the linear management structure.

Divisional (divisional) organizational structure

Divisional structures are based on the allocation of large production and business units with the provision of operational and production independence and the transfer to this level of responsibility for making a profit.

The structures are characterized by the full responsibility of the heads of departments for the results of the activities of the departments they head. Due to this important place in the management of companies with a divisional structure, it is not the heads of functional departments that occupy, but the heads of departments.

The structuring of the company by departments (divisions) is usually carried out according to one of three principles:

divisionally productive structures;

customer-oriented organizational structures;

divisional-regional structures.

The divisional management structure is shown in the figure

Rice. Divisional management structure

Benefits of a divisional management structure:

Rapid response to changes in external conditions of activity.

The convergence of the one who makes the decision with the one who implements it.

Good conditions for the growth of managers.

A high degree of coordination of management activities within one division.

Closer relationship between producers and consumers.

"Responsibility centers" work more effectively on issues of increasing profits.

Disadvantages of a divisional structure:

The presence of internal competition for resources and personnel.

Difficulty separating overheads and calculating costs.

Difficulty in reconciling the interests of different divisions.

Red tape and congestion due to the large number of vertical connections.

Duplication of functions at different levels of management.

The departments maintain a linear management structure.

The remoteness of the central office from specific areas of the organization's activities, and, consequently, this leads to an increase in the number of staff and other problems associated with official abuse.

Matrix organizational structure

The basis of the matrix structure is formed by a linear-functional structure, supplemented by program control structures. In addition to the head of the organization, a program manager is determined, whose rank is higher than the rank of the head of the organization.

The matrix structures are very diverse: project management, temporary task forces and permanent integrated teams. Temporary target groups are actively used by small businesses based on venture business.

Elements of matrix organization, and in some cases matrix departmentation as a whole, have been applied in the electronics industry and other areas of so-called high technology.

To implement a specific project, an autonomous structure is created, which is similar to one of the elements of a divisional structure

The matrix structure is shown in the figure:

The advantages of the matrix structure are:

Integration various kinds activities of the company within the framework of ongoing projects and programs.

Obtaining high-quality results for a large number of projects, programs, products.

Significant activation of the activities of managers and employees of the administrative apparatus.

Involvement of managers of all levels and specialists in the sphere of active creative activity.

Reducing the burden on senior management by transferring decision-making authority to the middle level.

Strengthening the personal responsibility of a particular leader.

Achieving greater flexibility and coordination of work.

Overcoming intra-organizational barriers without interfering with the development of functional specialization.

The disadvantages of the matrix control system are:

The complexity of the matrix structure for practical implementation.

The structure is complex, cumbersome and expensive to implement and operate.

It is a difficult form of organization;

In connection with the system of dual subordination, the principle of unity of command is undermined.

There is a tendency towards anarchy, in the conditions of its operation, the rights and responsibilities between the elements are not clearly distributed.

This structure is characterized by a struggle for power.

Excessive maintenance costs more leaders.

Difficulties arise with the prospective use of specialists in this company;

Partial duplication of functions is observed;

Management decisions are not made in a timely manner; usually characterized by group decision-making.

Rice. Matrix control structure

The business management system can be different. The most common and used is divisional. Let us consider in more detail its main content, disadvantages and advantages.

Divisional (from the French "division" - division) implies the presence of such a system in which there is a clear division of management into products and functions. The key figures in this case are the managers who head the leading production units.

The divisional management structure begins to form when there is a sharp increase in the size of the enterprise, the diversification of its activities (diversification), become more complicated in a situation where the external environment is changing very dynamically.

The fact is that adding new levels of hierarchy to it leads to the fact that the head of the company will not be able to make tactical decisions in these areas of activity. The divisional management structure allows you to delegate basic powers to managers who lead these areas, providing limited independence. But the head of the company reserves its strategic development.

Therefore, thanks to only the usual functional structure can be turned into a divisional one. The key figures are top managers who head a number of production departments.

Structuring in accordance with divisions should be carried out according to one of the selected criteria:

• by the nature of the products (services or products), the system becomes multi-divisional;
• by the presence of orientation to specific consumer groups, it turns into a consumer one;
• according to the characteristics of the territories served, the structure is distinguished by regional specialization;
• by the presence of several points of sale or large groups of consumers, it is a market one;
• the global system is distinguished by the type of products and regions of sale.

It implies that most of the functions (accounting, planning, etc.) are transferred to production units. This will allow you to fully or partially take responsibility for the development, manufacture and marketing of products. This will free up the upper echelon of the company in order to solve strategic problems.

The disadvantages of the divisional structure are as follows:

Firstly, such small business management is characterized by the presence of a large number of "floors" in the management vertical.

Secondly, in this case, the headquarters structures of the departments are separated from the main departments.

Thirdly, connections in the organization are vertical. Therefore, there are traditional disadvantages - paperwork, congestion of some departments, the presence of poor interaction.

Fourthly, duplication of powers at different "levels" is possible.

Fifth, the presence of high costs for the maintenance of managers.

The advantages of a divisional structure are as follows:

First, it is able to provide management of a diversified enterprise in which total strength employees is large and which has territorially remote divisions.

Second, the structure can provide flexibility and rapid response to changes in the company's immediate environment.

Thirdly, by expanding the boundaries of the departments, they can become a "profit center", working actively to improve the quality of this production.

Fourth, there is a close connection between the consumer and production.

Therefore, in large enterprises, a divisional management structure is the best option.

The ancestor of divisional structures is General Motors, although the first developments of the concept and the beginning of the introduction of divisional management structures date back to the 20s, and the peak of their industrial use falls on the 60s-70s.

The need for new approaches to the organization of management was caused by a sharp increase in the size of enterprises, the diversification of their activities and the complication technological processes in a dynamically changing environment. The first to restructure the structure according to this model were the largest organizations, which, within the framework of their gigantic enterprises (corporations), began to create production departments, giving them a certain independence in the implementation of operational activities. At the same time, the administration reserved the right of tight control over corporate-wide issues of development strategy, research and development, investment, and so on. Therefore, this type of structure is often characterized as a combination of centralized coordination with decentralized management (decentralization while maintaining coordination and control).

The key figures in the management of organizations with a divisional structure are not the heads of functional units, but the managers (managers) who head the production departments.

The structuring of the organization by departments is usually carried out according to one of three criteria: by products or services provided (product specialization), by consumer orientation (consumer specialization), by territories served (regional specialization). Organization of divisions along the product principle (Fig. 6) is one of the first forms of divisional structure, and now most of the largest manufacturers of consumer goods with diversified products use the product structure of the organization.

Rice. 6.

When using a divisional-product management structure, departments are created for the main products. Managing the production and marketing of any product (service) is transferred to one person who is responsible for this type of product. Heads of auxiliary services report to him.

Some businesses produce a wide range of products or services that meet the needs of several large consumer groups or markets. Each group or market has well-defined, or specific, needs. If two or more of these elements become particularly important to an enterprise, it may use a customer-centric organizational structure in which all of its divisions are grouped around certain customer groups (Figure 7). This type of organizational structure finds application in rather specific areas, for example, in the field of education, where in Lately along with the traditional general education programs, special departments for adult education, advanced training, etc. have emerged. An example of the active use of a consumer-oriented organizational structure is commercial banks. The main groups of consumers using their services are individual clients (individuals), pension funds, trust firms, international financial institutions. Customer-centric organizational structures are equally characteristic of trading firms wholesalers and retailers.

Rice. 7.

If the activity of the enterprise covers large geographical areas, especially on an international scale, then it may be appropriate to organize the structure according to the territorial principle, i.e. at the location of its subdivisions (Fig. 8). The regional structure facilitates the solution of problems related to local legislation, customs and consumer needs. This approach simplifies the communication of the enterprise with customers, as well as communication between its departments.

Rice. 8.

A well-known example of regional organizational structures is sales divisions. large enterprises. Among them, you can often find units whose activities cover very large geographical areas, which, in turn, are divided into smaller units, divided into even smaller blocks.

This concept is widely used in the automotive industry. General Motors car assembly divisions are scattered around the world. IN last years in many cities of Russia they assemble cars of the brands Toyota, Daewoo, Ford. VAZ also has assembly divisions in some regions of Russia.

Advantages and disadvantages

Different types of divisional structure have the same goal - to ensure a more effective response of the enterprise to a particular environmental factor.

The product structure makes it easy to handle the development of new products based on competition, technology improvement or customer satisfaction. The regional structure allows for more effective consideration of local laws, socio-economic systems and markets as market areas expand geographically. As for the structure focused on the consumer, it makes it possible to most effectively take into account the needs of those consumers on whom the enterprise depends most of all. Thus, the choice of divisional structure should be based on which of these factors is most important in terms of ensuring implementation. strategic plans enterprise and achieve its goals.

The divisional structure significantly accelerates the reaction of the enterprise to changes in the external environment. As a result of expanding the boundaries of operational and economic independence, departments are considered as profit centers, actively using the freedom granted to them to increase work efficiency.

At the same time, divisional management structures led to an increase in hierarchy, i.e. vertical of control. They demanded the formation of intermediate levels of management to coordinate the work of departments, groups, etc. The duplication of management functions at different levels ultimately led to an increase in the cost of maintaining the administrative apparatus.

Enterprise management, which is clearly separated by individual products and individual functions. The divisional structure arises when, as the main criterion for combining employees by departments, is issued by the organization.

A divisional structure is sometimes referred to as a product structure, a program structure, or a self-sustaining business unit structure. Each of these terms means the same thing: different departments come together to produce a single organizational result—a product, program, or service for a single customer.

The emergence of such structures is due to a sharp increase in the size of enterprises, the diversification of their activities, the complication of technological processes in a dynamically changing environment.

A simple addition to the structure of the enterprise of another level of hierarchy will lead in such conditions to the fact that the first person of the enterprise will no longer be able to make strategic decisions in certain areas of activity.

When a large organization produces products for different markets, the divisional structure works well because each division is independent business. Each such unit is headed by its own head responsible for the results of its work, and each business unit has functional divisions like an independent company. These divisions are engaged in the development of their own products, sales, marketing and financial operations.

Functional structure

Divisional structure

The main difference between a divisional structure and a functional one is that the management chain for each function converges in the divisional hierarchy at a lower level. In a divisional structure, differences of opinion between departments will be settled at the division-division level, not the head of the company.

In a divisional structure, divisions are created as autonomous units with their own functional departments for each division.

An alternative to divisional division by product line is to group the activities of companies by geographic regions or customer groups.

In such a structure, all functions in a particular country or region report to a single unit manager. The structure helps to focus the company's efforts on the needs of the local market. Competitive advantage can be provided through the production or marketing of a product or service adapted to the characteristics of a given country or region.

Advantages and disadvantages.

The division of employees and resources along divisional lines contributes to a flexible, responsive company response to changes in the external environment, since each of the business units is relatively small and fits well into its environment. Since the attention of employees is focused on a single product line, the needs of customers are satisfied at a high level. Coordination within functional departments improves because workers come together under the same roof and focus on the efficient production of one product line. There is good coordination within departments, but coordination between departments is often weak. Other important disadvantages are the duplication of resources and the high cost of managing autonomous units. Instead of one R&D department with all the experts in a given field, each department should have its own R&D department. As a result, the organization reduces its efficiency and loses the opportunity to enjoy the scale effect. Since the functional departments of the units are few, their technical specialization is low, and the opportunities for gaining experience and training are limited.

Summing up the above, we can briefly highlight the advantages and disadvantages of the divisional approach to the organizational structure:

• Advantages of the divisional structural approach.
• Fast response, good adaptability to unstable environment.
• Stimulates increased attention to the needs of customers.
• Excellent coordination of activities of functional units.

Disadvantages:

• Duplication of resources in departments.
• Less high level of technical development and specialization in departments.
• Weak coordination of interaction between departments.