The multidivisional structure can encourage undesirable competition between business units.

Question

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The multidivisional structure encourages each business unit to operate as a separate entity, pursuing its own goals and objectives. This can lead to competition between the units, which may not be aligned with the overall objectives of the organization. As a result, this competition can be detrimental to the overall performance of the company.

The Multidivisional Structure Can Encourage Undesirable Competition Between Business Units