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Hi Tutor,
Happy Teacher’s day.
Could you please help me with regards to functional structure? In Kaplan book one of the disadvantages is, ”Unsuitable for diversified or growing organisations since it is hard to access the performance of an individual product or market”.
Thank you.
If a large, diversified company has just one sales and marketing department, one production department etc then it can be difficult to focus appropriately on each product line. For example, different sales and marketing strategies will be needed for different different business sectors.
It would be better to set up separate divisions each concentrating on different sectors. For example, vehicle manufacturers may have a car division and a commercial vehicle division.
Each division is likely to have its own functional structure eg sales, manufacturing, HR. Sometimes functions like accounting are centralised to serve all divisions – ie shared services.
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