CMA Intermediate · Operations Management and Strategic Management · Formulation and Implementation of Strategy

A fast-growing Indian packaged-foods company organises its activities into separate units, each headed by a manager who is responsible for one product line such as snacks, beverages and dairy, with its own production and marketing staff. Which type of organisational structure is this?

This is a divisional, product-based structure, because the company groups its activities by product line and each line has a manager accountable for it with dedicated production and marketing staff. Functional structures group by activity, and matrix structures involve dual reporting, neither of which is described here.

AFunctional structure
BDivisional (product-based) structureCorrect
CSimple structure
DMatrix structure

Explanation

Grouping activities by product line with a manager accountable for each line, supported by its own functional staff, is the divisional (product) structure. A functional structure would group by activity such as production or marketing across all products. A matrix would add dual reporting lines, which are not described.

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