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

Meera Foods, with several distinct product divisions each serving different markets, wants divisional heads to have profit responsibility and operate with considerable autonomy, while corporate office retains strategic direction. Which organisational structure best fits this?

The divisional structure fits best. It organises the firm by product or market divisions, gives divisional heads profit responsibility and autonomy, and lets the corporate office retain overall strategic direction, which a functional or matrix arrangement does not provide as directly.

  1. ADivisional (multi-divisional) structureCorrect
  2. BSimple functional structure
  3. CPure matrix structure with dual reporting
  4. DBoundaryless virtual structure

Explanation

A divisional structure groups activities by product or market, gives divisional heads profit responsibility and lets corporate office focus on strategy. Functional structure groups by function, and the matrix uses dual reporting, which is not described.

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