Divisional Structure: The second basic structural form employed by organizations is the divisional structure. While growth through expansion of same line of business forces an organization to organize on functional basis, growth through geographic and product diversification necessitates the adoption of divisional structure. A) land, buildings B) assets, structures C) people, resources One person, alone, can start and run a small business, but when two or more people come together to accomplish a business goal, an organization is formed. Additionally, companies use more financial resources for distribution, printing and other expenditures when employing a multi-divisional structure. Functional Vs. Divisional Organizational Structure. It also enables to build bonds among them. If an organisation wants to grow and diversify, the functional structure cannot cope, so instead the divisional structure should be adopted. Common disadvantages of this structure include operational inefficiencies from separating specialized functions – for example, finance personnel in one division do not correspond with those in another division. It should also be noted that a number of experts, studying different types of organizational structures, tend to treat the divisional structure as a kind of traditional bureaucratic structures (Henry, 2007). One of the disadvantages of divisional structure design is that they divide _____, _____, and knowledge. Disadvantages: The divisional structure has certain disadvantages. The divisional structure enables a division to continue in this sort of culture. In the multidivisional structure, the subsidiaries benefit from the use of the brand and capital of the parent company. The divisional structure is useful because failure of one division doesn’t directly threaten the other divisions. Advantages & disadvantages of divisional structures Advantages . Multi-divisional structures can be costly. Disadvantages of the divisional approach are: - 1. Advantages and Disadvantages of Functional Organizational Structure In this type of organization, the emphasis is on managing some functions wherever the function may be performed in the enterprise. Should the company want to diversify further, it is easy to 'bolt on' another division. They insulate divisional managers from other divisional managers thus inhibiting their ability to coordinate activities, share resources, and learn from each other. Advantages & disadvantages of divisional organizational structure Chris Joseph - Updated February 06, 2018 Large companies that serve a varied customer base or operate in a number of geographic regions may choose to operate with a divisional structure. Consequently, labour expenses can be higher. The culture of the organization can assist individuals to better communicate with each other. 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