Select the correct answer.
YDA plc is a construction company that services residential, corporate, and government sectors. They essentially operate as three companies controlling their own resources with separate marketing, sales, and financial teams. What organisation structure is this an example of?
A. Functional
B. Divisional
C. Matrix
Answer (2)
The correct answer to the question is (B) Divisional.
In a divisional organizational structure, the company is divided into semi-autonomous units or divisions, each responsible for its own resources and result areas. These divisions typically operate as separate entities under the larger organizational umbrella, focusing on specific types of products, services, or geographic areas.
Here's why a divisional structure is appropriate for YDA plc:
Three Separate Areas of Operation: YDA plc services residential, corporate, and government sectors, and operates essentially as three companies. This suggests each sector operates independently, with control over its own strategies and operations.
Control Over Resources: Each division has its own resources. This autonomy typically defines a divisional structure, allowing each segment to tailor its approaches specifically to its market's needs.
Separate Marketing, Sales, and Financial Teams: In a divisional structure, it is common for each division to have its own separate teams for different functions like marketing, sales, and finance, allowing them to develop strategies specific to their division.
In contrast, a functional structure would organize the company by function (e.g., marketing, finance) rather than by product or service type. A matrix structure would involve employees reporting to multiple supervisors, commonly across both function and division, which does not seem to fit YDA plc's description.
By organizing into divisions, YDA plc can respond more swiftly to changes in their specific market segment, foster innovation, and maintain closer customer connections.
The answer to the question is (B) Divisional. YDA plc exemplifies a divisional structure by operating as three independent divisions for residential, corporate, and government sectors, each managing its own resources and teams. This allows for tailored strategies and effective responses to market demands.
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