Question : An organisation that makes office furniture is called Vasu Industries. The business decided to diversify its business ventures in order to boost market share and its potential for growth. Due to the significance of the project, numerous solutions were developed and thoroughly discussed among the organization's members. Shivam, the company's managing director, opted to add "Home Interiors and Furnishings" as a new line of business activity after weighing the numerous options. What framework should the varied organisation adopt to help it manage the developing complexity?
Option 1: Functional structure
Option 2: Divisional structure
Option 3: Formal Organisation Structure
Option 4: Informal Organisation Structure
Correct Answer: Divisional structure
Solution :
1. Product specialisation aids a divisional head in developing a variety of abilities that equip him for higher roles. 2. Divisional heads are responsible for profits because it is simple to identify and allocate revenues and costs associated with various departments to them.
Hence, the correct option is 2.
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