‘Deccan Motors Ltd.’ is shifting from a functional ...

CBSE Class 12 Business Studies 2026 All Sets Solved Paper

Question : 11 of 21

Marks: +1, -0

‘Deccan Motors Ltd.’ is shifting from a functional organisational structure to a divisional structure. Identify the benefit the company will get as a result of shifting to divisional structure :

It will promote flexibility and initiative because each division will function as an autonomous unit.
It will lead to minimal duplication of effort, which will result in economies of scale.
It will make training of employees easier as the focus will be on limited range of skills.
It will lead to occupational specialisation since emphasis will be placed on specific functions.

Solution:

In a divisional structure, division heads have the authority to make decisions independently for their specific product line (e.g., Commercial vs. Passenger vehicles). This autonomy fosters faster decision-making (flexibility) and encourages managers to take initiative to improve their specific division’s performance. Options (b), (c), and (d) describe advantages of a functional structure.

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