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CA Intermediate · Financial Management and Strategic Management · Strategy Implementation and Evaluation

Kaveri Foods is shifting from a single-product firm to a multi-product firm with several regional divisions. Each division head will run his own profit responsibility while corporate office keeps control of finance and long-term planning. Which organisational structure fits this arrangement?

The divisional structure fits. Operations are grouped by region or product, each division head carries profit responsibility, and the corporate office keeps strategic and financial control. A functional structure groups by activity, and a matrix needs dual reporting, which the scenario does not mention.

  1. ASimple structure
  2. BFunctional structure
  3. CDivisional structureCorrect
  4. DMatrix structure with dual reporting

Explanation

Divisional structure groups activities by product or region, giving each division head profit responsibility while the corporate office retains strategic and financial control. Functional structure groups by function such as production and marketing. Matrix involves dual reporting lines, which is not described.

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