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A Multidivisional Structure Can Be Costly Because, When a Company

question 66

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A multidivisional structure can be costly because, when a company has seven divisions like GE that each require special skills and knowledge, it can reduce a company's profit margin. In GE's case, departments devoted to important aspects of public relations, business development, legal, global research, human resources, and finance are maintained centrally to provide services to all seven divisions. This creates ________ and saves money.


Definitions:

Positive Outcome

A result or effect that is beneficial, desirable, or favorable in terms of meeting objectives or expectations.

Multiple Objective Trap

The difficulty in decision making when facing several objectives that may not be completely compatible with each other.

Base-Of-The Pyramid Markets

Economic strategies focused on providing goods and services to the widest and poorest population segments.

Benefit Corporations

A type of for-profit corporate entity, recognized in certain regions, that includes positive impact on society, workers, the community, and the environment in addition to profit as its legally defined goals.

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