What Is a Big Drawback of the Divisional Structure

question 59

Multiple Choice

What is a big drawback of the divisional structure?

• A)addressing specific concerns of various units within the organization
• B)providing clear responsibility for all activities related to a product
• C)increased cost from overlapping tasks between divisions
• D)increased coordination in units
• E)multiple strategies required for different regions

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Definitions:

Cost of Goods Sold

The exact costs incurred in the creation of a company’s sold goods, including the expenses for materials and labor.

Average Inventory

An estimation of the amount of inventory a company typically holds over a specific period, calculated as the average of the beginning and ending inventory.

Net Income

The company's net income, calculated by deducting all costs, taxes, and losses from its total revenue.

Profit Margin

A financial metric showing the percentage of revenue that exceeds the costs of goods sold, indicating the profitability of a company.