Question

When an organization with a functional structure diversifies into related product-markets, it generally Multiple Choice maintains its functional structure. develops a divisional structure. develops a matrix structure. develops a worldwide product-division structure.

Answer 1

Answer:

B). Develops a divisional structure.

Explanation:

A functional organizational structure aims to bifurcate the teams or groups on the basis of the functional or specialized area of the employees while a divisional structure organizes the teams in different divisions as per market, product, etc. Therefore, when an organization having a functional structure begins to diversify into product-related markets, it usually develops a 'divisional structure' as it is now focusing on the organization of teams corresponding to the end product or service offered by the organization. Thus, option B is the correct answer.