What Is the Divisional Organizational Structure?


An organizational structure defines a company's hierarchical setup. The authority-responsibility diagrams are drawn by an organizational structure. The channels of communication and workflows get enhanced by this structure. There are several types of organizational structures that companies can choose from. A divisional organizational structure is one where the employees are vested with decision-making abilities. There are several layers of command in the company. The company segments and categorizes all its strategic business functions.

Divisionalized Work

Divisionalized organizational structures are best suited to large companies. The management breaks down each important function into divisions and departments. There are separate divisions for marketing, Internet technology, finance, production, HR, etc. Some companies have different divisions divided by regions, such as countries or states. Each division is allocated a chunk of work to be accomplished. Goals and targets are set for for every division. Each division strives to attain its own targets. In the end, all the work carried out is collated as the organizational work.

Decision-Making Powers

Each department in the organization has its own set of hierarchies. There is general manager below whom are several managers. The managers in turn have their own teams to monitor. Every employee is directly responsible and accountable to her own immediate boss. This structure decentralizes authority setups. Every boss is vested with some powers. There are some decisions that he can himself take and there are some matters in which he needs to take the sanction and approval of his immediate boss.

Authority -- Responsibility

Fixing authority, responsibility and accountability becomes very easy with divisionalized organizational structures. Each department is apportioned its share of the work. In turn, each manager delegates work to his subordinates. As and when deviations occur in the planned path, it becomes easy to pinpoint the areas where they occurred and the persons who caused them. Corrective actions can be immediately taken. Also, as the tasks are broken down, attaining targets become relatively more easy.


Usually companies divisionalize their functions by three main categories. Companies that manufacture several products use a product-based divisionalized organizational structure. There is a separate division for each product. When the company is servicing several markets, it uses a market-based divisional organizational structure. There are different methods and strategies deployed for each market. The offices of the company may be stationed in different geographical locations. In such a case, the company uses a geographical divisionalized organizational structure

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