Divisional structure
A divisional structure groups activities around products, markets, customers or geographical areas, with divisions usually containing several business functions. It can increase focus and responsiveness and make divisional performance more visible. Potential costs include duplicated resources, inconsistent practices and rivalry between units. The amount of authority delegated to divisions remains a separate design choice.
Worked example
A group has consumer and industrial divisions, each with marketing, production and finance support. A central team sets group policy and funding priorities while division managers respond to their markets.
Common mistake
Do not confuse a product division containing several functions with a functional department serving all products. Divisional performance measures must also consider shared services and interdependencies.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | BT | Direct | September 2026–June 2027 |
| ACCA | SBL | Direct | September 2026–June 2027 |
| FIA | FBT | Direct | September 2026–June 2027 |