Tuesday, September 11, 2012

Disadvantages of Multidivisional structure


Disadvantages

a)      There may be conflict between production service and other department as the departments are inter dependent.
b)      There may be under utilization of plant capacity if the demand of the product or service is not sufficient.
c)       It creates the problem of effective control over production division by the top management.
d)      It maximizes administrative cost.
e)      The product or service manager may ignore the overall objective of organization.

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