Question

Hari Ltd. is growing, so they need specialists, more number of employees, create new departments and introduce new levels of management. Identify the structure that should be followed by Hari Ltd.

• A. Divisional structure
• B. Administrative structure
• C. Functional structure
• D. Informal structure

Hint:

Large and diversified companies use divisional structure for better coordination and focus within product or regional departments.

Answer 1

The Correct Option is A

As Hari Ltd. expands and requires specialized departments, more staff, and additional levels of management, the most suitable structure is the Divisional Structure. This organizational format groups activities based on product lines, regions, or markets, allowing for a focused approach in each segment.
Benefits of Divisional Structure:

• Greater flexibility and accountability within divisions.
• Specialization and clear focus on product or geographic segment.
• Decentralized decision-making for faster responses to market needs.

Explanation of Other Options:

• (B) Administrative structure: A vague term, not a formal organization type.
• (C) Functional structure: Suitable for smaller or less diversified companies; focuses on job specialization, but not new product-based divisions.
• (D) Informal structure: Arises from social interactions—not an official or scalable organizational design.