Quick Look at Divisional Structure Organization

Divisional Structure Organization is a structure organization that is categorized by the similarity of products, services, market and geographic location. Divisional Structure Organization usually is implemented in a mid-level and above sized companies, this is due to the higher cost compared to other structure organizations.

When a company grows, it will focus its attention on managing different lines of product in many industry and decentralizing its authorities to take decision. When the company starts to make acquisitions and improving or making new products in different industry and markets, they usually change their structure to more decentralized with many divisions. Each divisions can operate independently that are managed by a division manager that is directly responsible to the CEO of the company. In Divisional Structure Organization, division manager must prepare their own strategy because the challenges they faced are different from other divisions, so the strategy they prepared might be different from other divisions. In Divisional Structure Organization, the divisions can also be a good place to train a young manager, beside that, it's also a good place to learn and improve entrepreneurship skill and increases initiative points in a company. To know the format of Divisional Structure Organization, look at the following picture.

 Taken from: Samuel C. Certo & J.Paul Peter, Strategic Management, McGraw-Hill, 1990, p.125.

 Like with the other organization structures, Divisional Structure Organization also have advantages and disadvantages. Below are the advantages of Divisional Structure Organization:

• Coordination between functions becoming faster and easier.
• Flexibility in the company's structure.
• Specialization in each division can be maintained.
• More career opportunities.
• Creating competition in the organization,
• Less work for CEO, so s/he can focus more on deciding strategy decision.

As for the disadvantages of Divisional Structure Organization, they are

• Reduced communication between functional specialization.
• Creating a very high chance of competition between divisions.
• Major delegating can cause problems

Reference

http://ilmumanajemenindustri.com/pengertian-contoh-bentuk-struktur-organisasi/

http://web-suplemen.ut.ac.id/ekma5309/fproses_certob3.htm