Business Structures Quiz

What is a key benefit of the Divisional structure in an organisation?

• Benefit: Greater focus on specific markets or products.

• Benefit: Easier communication across departments.

Answer explanation

The Divisional structure allows organizations to focus on specific markets or products, enabling tailored strategies and better responsiveness to customer needs, which enhances overall effectiveness.

How does a Functional structure typically organise its departments?

• By specialised functions such as marketing, finance, and production.

• By geographical regions.

Answer explanation

A Functional structure organizes departments by specialized functions such as marketing, finance, and production, allowing for efficiency and expertise in each area.

What is a common challenge faced by organisations with a Divisional structure?

• Challenge: Duplication of resources across divisions.

• Challenge: Slow decision-making process.

Answer explanation

A common challenge in a Divisional structure is the duplication of resources across divisions. Each division may have its own resources, leading to inefficiencies and increased costs, making this the correct choice.

Which organisational structure is known for having dual reporting relationships?

• Functional structure.

• Matrix structure.

Answer explanation

The matrix structure is characterized by dual reporting relationships, where employees report to both functional and project managers. This allows for more flexibility and collaboration across different departments.

What is an advantage of the Functional structure in an organisation?

• Advantage: Specialisation and expertise within departments.

• Advantage: Enhanced coordination across different functions.

Answer explanation

The correct choice highlights that a Functional structure allows for specialization and expertise within departments, leading to increased efficiency and skill development, which enhances overall organizational performance.

What is a key characteristic of a Functional business structure?

• Characteristic: Departments are organized by product lines.

• Characteristic: Departments are organized by specialized functions.

Answer explanation

A Functional business structure is characterized by organizing departments by specialized functions, such as marketing, finance, and HR, allowing for efficiency and expertise in each area.

Which of the following is a common issue in a Functional structure?

• Issue: High level of autonomy for each department.

• Issue: Potential for communication barriers between departments.

Answer explanation

In a Functional structure, departments operate independently, which can lead to communication barriers. This hinders collaboration and information flow between departments, making it a common issue.

How does a Functional structure impact employee development?

• Impact: Encourages broad skill development across various functions.

• Impact: Promotes deep expertise within a specific function.

Answer explanation

A Functional structure allows employees to specialize in their roles, leading to deep expertise within a specific function. This focus enhances skill development in that area, making the correct choice the one that promotes deep expertise.

How does a Divisional structure typically organise its divisions?

• By product lines or services.

• By employee seniority levels.

Which organisational structure is most likely to face challenges with inter-departmental coordination?

• Functional structure.

• Matrix structure.