A company comprised of competing divisions, allows its top management to frame policies or sound strategic thinking on various aspects like allocation of resources, funds, etc. In the light of above statement, state the disadvantages of divisional structure.
The disadvantages of divisional structure are as follows:
(i) There is duplication of physical facilities and functions.
(ii) Conflicts may arise between division of allocation of resources and funds.
(iii) Greater autonomy to divisional heads may lead to misuse of authority.