Question

In the divisional structure, if there were a separate sales organization responsible for providing revenue for each of the divisions, what are advantages and disadvantages of such a structure?

What if the structure was that way from the outset and an acquisition was made of a company with its own sales force. how hard would it be to integrate the acquired company into the new structure?

Answer 1

Divisional structure is divided into departments on the basis of the product lines, market or segments. If there is a separate sales organisation then the structure will not affected much and will provide us benefits of - revenue from each department can be calculated independently without affecting the another and leads to greater accountability. The coordination with in each department will not be affected and team work is not hampered. This type of structure will easily be able to adapt itself to changing environment and therefore has more flexibility.

However, this structure leads to increase within the organisation among the several departments. wherever the products are related the integration becomes difficult. Due to overlapping of activities and duplication of work there is increased cost and wastage of resources. The communication among departments is difficult and so the coordination as well.

Acquisition by a new company will make the structure more complex and it will be difficult to integrate the sales force. As the divisions are performing all sort of function in one department the understanding of each division is necessary for integrating in the given structure. this will lead to disturbance in each and every department on the organisation and may not lead to smooth functioning of the business without changing the organisation structure.