A major strength of the functional structure, which becomes one of the most potentially serious weaknesses of the product structure, when various product/service divisions represent one product/service is ____________.
A) Loss of profits
B) Loss of market share
C) Loss of economies of scale
D) Loss of management formation

Question

Quizplus · Accepted Answer

The major strength of the functional structure is the ability to achieve economies of scale due to the specialization of resources and expertise within each department. However, when various product/service divisions represent one product/service in the product structure, the specialization of resources may be lost, resulting in a loss of economies of scale. This can have a negative impact on the cost-effectiveness of the organization, potentially leading to a loss of profits.

A Major Strength of the Functional Structure, Which Becomes One