Geographic structure: A geographic structure is found in few organizations and this structure groups the employees together that

are based on specific geographical locations. This structure is often used by companies that are located abroad and are termed as multinational corporations. This practice is usually opted by organizations that are based in United States. Employees are divided into different geographical aspects. For e.g. employees of a single organization would be divided as manager operations of the Asia Pacific, manager sales of Europe and etc (Gibson, 2008). Large business organization incorporates this strategy in order to divide different regions. Customers can be managed quite effectively with this approach. Advantages of Geographic structure: the geographic structure is usually a complex structure but if its managed properly than organizations can easily achieve their goals. Customers develop a sense of attraction with the employees because the local employees are targeting their needs. Emphasis must be laid on particular areas and different marketing strategies can be applied proactively. In this manner organizations can benefit in both the short and the long run. Disadvantages of Geographic structure: Besides certain advantages there are certain disadvantages of the geographic structure. Organizations wont incur extra costs in functional structure and implementing an entire new structure would initiate certain new costs. These extra costs would have a negative effect on the performance of an organization and stakeholders of the organization might not support this approach. The complexity of this structure would add difficulty in management and the senior management of the organization would face difficulties in managing the employees
Advantages Helps to achieve goals Gains customer loyalty Increase employment opportunity

Disadvantage

Difficulty in management Cost

Divisions work well because they allow a team to focus upon a single product or service, with a leadership structure that supports its major strategic objectives. Having its own president or vice president makes it more likely the division will receive the resources it needs from the company. Also, a division's focus allows it to build a common culture and esprit de corps that contributes both to higher morale and a better knowledge of the division's portfolio. This is far preferable to having its product or service dispersed among multiple departments through the organization. A divisional structure also has weaknesses. A company comprised of competing divisions may allow office politics instead of sound strategic thinking to affect its view on such matters as allocation of company resources. Thus, one division will sometimes act to undermine another. Also, divisions can bring compartmentalization that can lead to incompatibilities. For example, Microsoft's business-software division developed the Social Connector in Microsoft Office Outlook 2010. They were unable to integrate Microsoft SharePoint and Windows Live until months after Social Connector could interface with MySpace and LinkedIn. Some experts suggested that Microsoft's divisional structure contributed to a situation where its own products were incompatible across internal business units. Large organizations that want the focus of a division could instead spin off into a free-standing subsidiary. Smaller organizations can work through major projects via dedicated departments or ad-hoc cross-functional work teams.

Disadvantages

Alternatives

 Making It Work
To be successful, divisions must be well managed. Executive leadership is the single most important determinant of success for a company using a divisional structure. The top leaders need to understand what each division is doing and provide leadership to the division chiefs on how to accommodate new strategic directions or more effectively partner across divisions. In addition, the executives should have a solid grasp of resource use. Having a shared pool of centrally-managed resources like administrative support or office equipment can reduce costs and organizational complexity.

Definition
Businesses that use a divisional structure, also called a product structure, break their organization down into a number of selfcontained divisions. A self-contained division is a collection of functions that work together to produce a product and develop a strategy to compete; they operate as separate profit centers or businesses. These divisions are created according to the type of products or services produced, the geographical area served and customer needs in the market. For example, divisions may be created according to the U.S., Canada and Mexico geographical markets. Certain key functions, such as finance, personnel and corporate planning, typically are provided centrally at the company headquarters.

Overall Advantages
Because the divisional structure is based on an extensive delegation of authority, the performance of each division can be measured directly. In addition, managers can be held accountable for the sales and profits of their division. As a result, division managers usually perform better and employee morale is generally higher. Other advantages of a divisional structure include a more efficient and effective ability in coordinating activities among divisions, greater flexibility in responding to changes in the local market and a simpler process in changing the size of the business by merely adding or removing divisions. Furthermore, divisional expertise can be more specialized.

Specific Advantages
Divisional structures organized by product, customer or geography have their own distinct advantages. The divisional structure organized by product is most advantageous when an organization offers only a few products or services that differ substantially. A structure organized by customers is best used when you have a few major clients that make up most of your business or when the most various products services you provide are to these clients. These types of structures allow you to more easily implement business strategies and give special emphasis to products where needed. Using divisional structures organized either by markets or geographic areas are most appropriate when your divisions are similar in function and located in different regions or conduct business in different markets. These structures enable business decisions and the coordination of activities among divisions to be made locally. This allows for an improved adaptation and implementation of overall business strategies that better fit the demands of the local market.

Disadvantages
The divisional structure does have disadvantages, including potentially dispersing technical competence and expertise or fostering unhealthy rivalries among divisions. The divisional structure also may increase costs by requiring functional specialists and better qualified managers for each division. Moreover, because there is an overemphasis on divisional rather than organizational goals, the divisional structure may result in duplicating resources and efforts -- such as staff services, facilities and personnel -- across divisions.

Companies employing the divisional organizational structure create divisions devoted to product lines, geographical location or a customer type such as government or women. Called strategic business units, or SBUs, these divisions stand alone, operating as if they were independent businesses in and of themselves. Divisional structures developed from the traditional functional structure, which features departments built on related work tasks, such as marketing. By pulling resources from these departments to devote to a specific product,

location or customer, the divisional organizational structure gains some advantages the functional structure lacks.
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Future Executives
A manager overseeing a strategic business unit gets the chance to run operations as if in charge of a company. Concerned with creating and enacting strategies that will make an SBU competitive in the short to medium term, divisional managers must also consider and plan for the long term. Such big picture thinking is typically the purview of upper management. Businesses wishing to foster the strategic and leadership skills needed by future executives can use the divisional structure to move middle managers from specialists in a particular aspect of the company to generalists.

Unity of Purpose
All members of an SBU focus on a common purpose. This unity enhances coordination and cooperation among the divisions employees, who work together to achieve the units common goals. Unity also enhances communication, the context of the division s shared experiences creating jargon, inside references and customs. A sense of belonging only enhances the division's unity.

Responsiveness
United behind the divisions focus, employees and the SBU as a whole tend to understand and be more responsive to the needs of their customers and their environment. Additionally, the better employee synthesis allows the division to move more quickly than organizations grouped by function alone.

Track Performance
Gathering all the people devoted to a single geographical region, product or market makes performance easier to track and measure. This, in turn, makes it easier for managers to gauge the effectiveness of plans, procedures and policies and also to set appropriate benchmarks. When things go well, the divisional structure makes it easier to pinpoint those deserving credit. When things go wrong, it is also easier to determine those responsible and take corrective action.

Tailored SBU Structures

Often companies organize individual SBUs around work activities as if each unit is a functional organizational structure. SBUs dont have to choose that setup, though. Separating a company into divisions provides an opportunity to structure each SBU in the way that best facilitates its goals. An SBU devoted to standardized production, for instance, can stick with the functional structure, maintaining its tight control and ability to produce reliable, standardized outputs. An SBU located in an unstable geographical location might choose the less rigid team structure, which features less bureaucracy and greater ability to adapt to dynamic market conditions.

3 disadvantages of divisional organisation

By Saritha Pujari Business

The following are the main disadvantages of divisional organisation structure: (1) Conflicts between Divisional Heads:

Every divisional head wants to establish his supremacy. To satisfy ego each demands maximum resources for his division. This situation leads to conflicts among the various divisional heads. (2) Duplicity of Functions:

The entire set of functions (e.g., production, marketing, financial, personnel, etc.) is required for all divisions. It gives rise to duplicity of efforts among divisions. Hence, resources are misused and cost of operations is unnecessarily increased. (3) Selfish Attitude:

Every division tries to display better performance sometimes even at the cost of other divisions. This shows their selfish attitude. Consequently, it hits the interest of the concern as a whole