The multidivisional organization structure

The organization is divided into divisions on the basis of products and/or geography, and each division is operated in a functional form, but with certain key functions retained at company headquarters e.g. planning, finance and personnel policy. This is a common organizational form for highly diversified firms operating in more than one country. A typical chart for a divisionalised company would be as given below:

Multidivisional organisational structure

The regions act very much like self standing companies, producing and marketing the products developed by the parent company.

Research and development activities and key corporate standards are controlled worldwide via the functional divisions while the headquarters provide group policy in key areas such as finance and personnel.

It is possible to maintain a balance between necessary corporate control from the centre and desired divisional independence at the regional and functional levels

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