The upper management of a toy company has decided that more divisions would be useful. They decided that one-year-olds have different needs than two-year-olds, so they created a division for each age. They also decided that people in the northern part of the state have different needs than the people in the central part of the state and the southern part of the state, so they created three more divisions. Lastly, they decided that because they serve schools, daycares, families with many kids, and families with few kids, they needed four more divisions. How would an expert on organizational structures MOST LIKELY rate this strategy?
A) Poor; operating that many divisions will drastically increase operation costs.
B) Poor; divisions never work and lead to motivation problems amongst the employees.
C) Excellent; customer service will be flawless and on target.
D) Excellent; competition between divisions for resources will incite passion amongst the employees.

Question

Quizplus · Accepted Answer

The expert on organizational structures would most likely rate this strategy as poor because creating nine different divisions would drastically increase operating costs. It would also increase the complexity of managing the different divisions, and there is a risk of redundancies in resources and overlapping responsibilities. Moreover, having too many divisions can make the organization less flexible, and decisions may become slow and bureaucratic.

The Upper Management of a Toy Company Has Decided That