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ACCA Applied Knowledge · Business and Technology · The formal and informal business organisation

Which of the following is a recognised advantage of a multidivisional structure for a large, diversified group?

The advantage is that divisional managers focus on their own products or markets and each division's performance can be assessed separately. Head office control still remains, and economies of scale from specialisation are associated with functional structures rather than divisional ones.

  1. ADivisional managers can focus on their own products or markets, and performance can be assessed by divisionCorrect
  2. BIt removes the need for any central head office control
  3. CIt achieves the greatest economies of scale from specialist functions

Explanation

Divisions allow managers to concentrate on specific products or markets and make divisional performance measurable. Head office still sets strategy and controls, and economies of scale from specialisation are a strength of the functional structure, not the divisional one.

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