Companies with divisional structures should create divisions around different product lines but should avoid organizing around geographic areas or customer types.

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Companies with divisional structures can choose to organize divisions around different product lines, geographic areas, or customer types. The choice depends on the company's strategy, goals, and market situation. For example, if a company sells products to different types of customers across different regions, organizing divisions around different customer types or geographic areas can help tailor the products and services to each market segment's unique needs. However, if a company focuses on developing and selling distinct product lines, organizing divisions around each product line can help ensure a clear and dedicated focus on each line's success. Therefore, there is no one-size-fits-all approach, and companies should assess their context to determine the most suitable divisional structure.

Companies with Divisional Structures Should Create Divisions Around Different Product