Answer to Question 1
The various control problems that emerge in a functional structure are:
1. As more organizational functions develop, each with its own hierarchy, they become increasingly distant from one another. They develop different subunit orientations that cause communication problems.
2. As organizations grow and the number and complexity of their functions and products increases, the information needed to measure the contribution of any one function or product to overall profitability is often difficult to obtain.
3. As a company grows, it may need to set up shop and establish manufacturing or sales facilities in different geographic regions to serve customers better. Geographic spread can pose a control problem within a functional structure when centralized control from one geographic location prevents this from happening.
4. As the range and quality of an organization's products increases, more and more customers are attracted to the organization and they have different kinds of needs. Servicing the needs of new kinds of customer groups and tailoring products to suit them are relatively difficult in a functional structure.
5. As an organization becomes more complex, top managers may be forced to spend so much time finding solutions to everyday coordination problems that they have no time to address the longer-term strategic problems facing the company.
Answer to Question 2
Answer: A
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