Divisional Structure for Shrey and Co's Expansion

In order to expand their business activities by adding leather bags, belts and garments, Shrey and Co will need to adopt a new organizational structure that can manage the new business units efficiently. The recommended structure for this purpose is a divisional structure.

Definition of Divisional Structure:

The divisional structure is a type of organizational structure where the company is divided into self-contained divisions or business units that are responsible for their own operations, including production, marketing, and finance. Each division is headed by a divisional manager who has the authority to make decisions related to the division's activities.

Reasons for recommending Divisional Structure:

1. Focus on Core Competencies: By adopting a divisional structure, Shrey and Co can focus on their core competencies of shoe manufacturing while each new business unit can focus on their respective product lines. This will ensure that each unit is able to specialize and excel in their specific area of expertise.

2. Efficient Resource Allocation: With the divisional structure, each division has its own resources and budget, which can be allocated efficiently to meet the specific needs of that division. This will ensure that resources are not wasted and are utilized effectively.

3. Better Coordination: Each divisional manager will be responsible for the coordination of activities within their division, which will lead to better communication and coordination between the various business units. This will ensure that the company's overall goals and objectives are met.

4. Improved Decision Making: With the divisional structure, decision making will be decentralized, with each divisional manager having the authority to make decisions related to their division. This will lead to quicker decision making and greater responsiveness to market changes.

Conclusion:

In conclusion, a divisional structure is the most suitable organizational structure for Shrey and Co's expansion plans. This structure will allow the company to focus on their core competencies, allocate resources efficiently, improve coordination between business units, and make better decisions.