Multidivisional Structure Companies Multidivisional str

Multidivisional Structure Companies
Multidivisional structure are structures in which each product division is given its own set of support functions so they become self contained decisions. A multidivisional structure has two innovations that overcome the control problems a company experiences with the product division structure when mangers decide to produce a wider and wider range of different products and in different industries. There are several advantages and disadvantages of Multidivisional Structures.
Examples of Multidivisional Companies: GE IBM Johnson & Johnson
Advantages of Multidivisional Structure
Increased Organizational Effectiveness
Increased Control
Profitable Growth
Internal Labor Market
IV Disadvantages of a Multidivisional Structure
Managing the Corporate-Divisional Relationship
Coordination Problems Between Divisions
Transfer Pricing
Bureaucratic Costs
Communication Problems
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