A company has been registered under the Companies Act with an authorised share capital of ₹ 20,000 crore.

Its registered office is situated in Delhi and manufacturing unit in a backward district of Rajasthan. Its marketing department is situated in Bhopal. The company is manufacturing Fast Moving Consumer Goods (FMCG). Which type of organisation structure would suit the requirements of the company?

a)
Functional structure

b)
Divisional structure

c)
Formal organisation structure

d)
Informal organisation structure

Correct answer is option 'B'. Can you explain this answer?

Question

A company has been registered under the Companies Act with an authorised share capital of ₹ 20,000 crore.

Its registered office is situated in Delhi and manufacturing unit in a backward district of Rajasthan. Its marketing department is situated in Bhopal. The company is manufacturing Fast Moving Consumer Goods (FMCG). Which type of organisation structure would suit the requirements of the company?

a)
Functional structure
b)
Divisional structure
c)
Formal organisation structure
d)
Informal organisation structure

Correct answer is option 'B'. Can you explain this answer?

Answer

Divisional Structure would suit the requirements of the company.

Reasoning:

A divisional structure is a type of organizational structure where the company is divided into smaller, self-contained units or divisions, each responsible for its own operations. This type of structure is suitable for companies that operate in different geographical areas or have different product lines. In this case, the company has a registered office in Delhi, a manufacturing unit in Rajasthan, and a marketing department in Bhopal, indicating that it operates in different geographical areas.

Moreover, the company manufactures Fast Moving Consumer Goods (FMCG), which suggests that it has different product lines. A divisional structure would allow each division to focus on its specific operations and products, resulting in better efficiency, faster decision-making, and improved customer service. Each division can have its own functional structure, such as finance, human resources, and marketing, to support its operations.

Therefore, a divisional structure would be the most appropriate organizational structure for this company.

Answer

Considering the geographical spread and diverse functions of the company, a divisional structure would be a suitable choice for the organization. This structure allows the company to organize its operations based on geographical location or product lines.

In this case, the company has distinct locations for its registered office, manufacturing unit, and marketing department in different regions. A divisional structure would allow each division (e.g., Delhi, Rajasthan, Bhopal) to have its own functional departments such as production, marketing, and administration, tailored to the specific needs and challenges of that region.

Therefore, the correct answer is:

**2. Divisional structure**

This would help the company efficiently manage its operations across different locations and functions while ensuring coordination and focus on the specific requirements of each division.

Similar Class 12 Doubts

Rishabh Shoes India Limited is dealing in the manufacturing of shoes and is doing well in the industry. It plans to diversify the product by including manufacturing of sports wears, sports goods and sports equipments.Name the organisational structure it will have to adopt.

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