Organizational structures define the hierarchy or an organization, and determine the way information

flows within it. An organization with a functional structure is divided based on functional areas, such as
IT, finance, or marketing. Divisional structures group various organizational functions into product or
regional divisions. However, why divisional is more appropriate ?

A divisional organizational structure gives a larger business enterprise the ability to segregate large
sections of the company's business into semi-autonomous groups. While generally better suited to
larger organizations, in some circumstances this formal structure may also benefit a smaller business. In
all cases, groups are mostly self-managed and focused upon a narrow aspect of the company's products
or services. As with any organization structure, divisional structures have both strengths and
weaknesses.

Furthermore, the divisional organizational structure organizes the activities of a business around
geographical, market, or product and service groups. Thus, a company organized on divisional lines
could have operating groups for any country all around the world. Each such division contains a
complete set of functions.

This approach is useful when decision-making should be clustered at the division level to react more
quickly to local conditions. The divisional structure is especially useful when a company has many
regions, markets, and/or products. However, it can cause higher total cause if a company do not work
necessarily work together for the good entire of entity

The key points in favor of the divisional structure involve placing decision making as close to the
customer as possible. Such as, at the international it focuses on all retail customers outside of the
country. It shares product development and production facilities with the retail division, and has its own
accounting and sales employees.Thus, The divisional structure allows decision-making to be shifted
downward in the organization, which may improve the company's ability to respond to local market
conditions.