Question

a .Briefly identify the two ways taht a large organisation can be structure

b. Explain the advantages and disadvantages that a company may hve if it decides to structure divisonally

c. A company can choose a cost based price as its tranfer price. However, there are a further two methods that it can choose. Identify and explain the further two bases that it could choose

Answer 1

Q1

Two ways of organization structure:

Functional: Under this form there are various functional areas like, marketing, accounting, research and development, etc. Such structure helps to evaluate individual performance, dedicated to a function. One disadvantage of this type is lack of communication between the functional areas.

Divisional: This form is based on products, and operations. Suppose an individual project has separate division. Within that division all activities like, manufacturing, accounting, marketing, etc should be done. It helps to improve communication, because each division operates like a single unit. But it has a disadvantage too---there might be a conflict between the divisions because of under/over performance.

Q2.

Divisional: This form is based on products, and operations. Suppose an individual project has separate division. Within that division all activities like, manufacturing, accounting, marketing, etc should be done. It helps to improve communication, because each division operates like a single unit. But it has a disadvantage too---there might be a conflict between the divisions because of under/over performance.