Answer to Question 1
Boom Correct answer
Answer to Question 2
The advantages of a multidivisional structure are:
1. Increased organizational effectiveness: A division of labor generally increases organizational effectiveness. In a multidivisional structure there is a clear division of labor between corporate and divisional managers.
2. Increased control: Corporate managers monitor the performance of divisional managers. The extra control provided by the corporate office encourages the stronger pursuit of internal organizational efficiency by divisional managers.
3. Profitable growth: When each division is its own profit centerthat is, when its individual profitability can be clearly evaluatedcorporate headquarters can identify the divisions in which an investment of capital will yield the highest returns. Thus corporate executives can make better capital resource allocation decisions to promote corporate growth.
4. Internal labor market: The most able divisional managers are promoted to become corporate managers. Thus divisional managers have an incentive to perform well because superior performance results in promotion to high office.
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