Why Might an Organization Choose a Divisional Structure

question 36

Multiple Choice

Why might an organization choose a divisional structure?

• A)to create smaller, more manageable units within the organization
• B)to facilitate specialization of skills and knowledge throughout the production process
• C)to permanently assign employees to cross-functional teams
• D)to group people and resources by function and product simultaneously
• E)to enhance feedback processes by establishing dual reporting relationships

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Definitions:

Partnerships

A lawful business arrangement involving two or more people who divide both the management responsibilities and the earnings.

Residual Income Claimants

Individuals or entities entitled to the income that remains after all other expenses and obligations have been met, typically referring to owners or shareholders.

Operational Efficiency

The ability of an organization to minimize inputs and costs while maximizing outputs and services.

Market Rate

The prevailing price or interest rate for goods, services, or securities in a competitive market.