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

Sundaram Auto, an established manufacturer, finds that its functional structure causes delays because the engine, chassis and electric-vehicle divisions all depend on the same few design engineers. The management wants a structure where employees report to both a functional head and a product manager at the same time. Which structure is being considered?

The structure is a matrix structure. It features dual reporting, where staff report to both a functional head and a product or project manager, which allows scarce specialists like design engineers to be shared across products. Divisional and SBU structures keep a single reporting line per unit.

  1. ADivisional structure
  2. BMatrix structureCorrect
  3. CNetwork structure
  4. DStrategic business unit structure

Explanation

A matrix structure uses dual reporting lines, with employees answerable to both a functional manager and a project or product manager, allowing shared specialists to serve several products. A divisional or SBU structure gives each unit its own resources under one head, and a network structure relies on outsourcing partners.

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