Surekha runs a shoe manufacturing factory. She wants to expand her business. For expansion she contemplates to enter into the manufacturing of leather bags and western formal wear apart from the running business of shoes. By doing this her company will be able to provide many products to working women under one roof.

Which organisation structure will you suggest her and why?

In this situation, divisional organisation structure will be suitable as it provides equal importance to all products. Except this, it is beneficial in the following ways:
(i) Development of Divisional Heads: The head of each division looks after all the functions connected with their product, that is, purchase, sale, advertisement, production, finance, etc. This thing helps in the development of varied skill in a divisional head.

(ii) Divisional results can be Assessed: All the activities of each division are carried out independently. Hence, the divisional results (profit/loss) can be assessed easily. On this basis, an unprofitable division can be closed.

(iii) Quick Decision-making: Every division is independent in itself. The divisional manager can take any decision regarding his division independently without consulting other divisional managers. Hence, decisions are quick and effective.

(iv) Easy Expansion: For every product a separate division is opened. If a company wants to introduce a new product, it can be introduced easily without disturbing the existing divisions. Hence, it is easy to expand the concern.