The costs of operating a multi-divisional structure are high compared to the functional structure.

Question

Quizplus · Accepted Answer

Multi-divisional structure involves more coordination, communication, and administration due to the presence of several divisions. This results in higher costs compared to the functional structure, where the organization is split into departments based on functions, such as finance, marketing, or production. The functional structure is relatively simpler, with a clear hierarchy and fewer layers of management, resulting in lower costs of operation.

The Costs of Operating a Multi-Divisional Structure Are High Compared