Divisional management structure: characteristics, advantages and disadvantages

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business management system may be different.The most common and is used by the division.Consider in more detail its main contents, the advantages and disadvantages.

Divisional management structure (from the French. "Division" - the separation of) implies the existence of such a system, in which there is a clear separation of the management of products and features.Key figures in the case - managers who head major production units.

Divisional management structure begins to form when there is a sharp increase in the size of the company, diversifying its activities (multidisciplinary), complicated processes in a situation where the external environment is very dynamic changes.

fact that adding to it new levels of hierarchy leads to the fact that the head of the company will not be able to take tactical decisions in these areas of activity.Divisional management structure allows managers to delegate basic credentials that led these areas, leaving limited autonomy.But the head of the company reserves its strategic development.

Therefore, only through delegation of authority, ordinary functional structure can be converted into a divisional.The key figures are top managers, who head a number of production units.

Structuring according to the divisions should be made to one of the selected criteria:

  • by the nature of the products (services or products), the system becomes multidivizionnoy;
  • by the presence of targeting specific consumer groups it becomes a consumer;
  • on the specifics of the territories served by the regional structure of different specializations;
  • by the presence of several points of sales or major consumer groups, it is the market;
  • by product type and region is allocated a global implementation of the system.

Divisional management structure means that most of the functions (accounting, financial management, planning, etc.) is transmitted to the operating units.This will completely or partially take responsibility for the development, manufacture and marketing of products.This frees the upper echelon of the company to solve strategic problems.

Disadvantages divisional structure following:

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

Secondly, in this case the structure of the staff offices are separated from the main departments.

Third, due to the organization - vertical.Therefore, there are the traditional shortcomings - paperwork, saturation of certain departments, the presence of a bad interaction.

Fourth, possible duplication of powers on different "levels".

Fifth, the presence of the high cost of maintenance managers.

Advantages divisional structure following:

Firstly, it is able to manage a diversified enterprise in which the total number of employees is high and which are geographically remote locations.

Secondly, the structure can provide flexibility and faster response for changes in the immediate environment of the company.

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

Fourth, there is a close relation of the consumer and the production.

why large enterprises divisional management structure is the best option.