Taejeah

A large organisation can be structured in two (2) ways:
1 Functionally
2 Divisionally

Functionally refers to where all activities of a similar type within a company, such as production, sales, research are under the control of the appropriate departmental head.

Divisionally is when divisions are split in accordance with the products or services made or provided.

Divisional managers are therefore responsible for all operations (production, sales and so on) relating to their product, the functional structure being applied to each division.

Part of the company will be divisionalised and activities such as administration are structured centrally on a functional basis with a responsibility to provide services to all divisions.

A divisonal structure will lead to decentralisation of the decision-making process and divisional managers may have the freedom to make certain decisions for example: to set selling prices, choose suppliers, make product mix, output decisions etc...

However, decentralisation is a matter of degree depending on how much freedom divisional managers are given.

I do hope that posting a few pointers of the F5 exam will help some of you guys who are sitting exams in December.

Let me know if my notes/pointers have been helpful to any of you.