Advantages
1. Quick decision-making: Divisional manager can take any decision
regarding his division independently which makes decisions quick and
effective.
2. Divisional results can be assessed: Divisional results (profit/loss) can
be assessed easily. On this basis any unprofitable division can be closed.
3. Growth and Expansion: It facilitates growth and expansion as new
divisions can be added without disturbing existing departments.
Disadvantages
1. Conflicts among different divisions on allocation of resources.
2. Duplicity of Functions: Entire set of functions is required for all
divisions. It gives rise to duplicity of efforts among divisions & increases
cost.
3. Selfish Attitude: Every division tries to display better performance and
sometimes even at the cost of other divisions. This shows their selfish
attitude.
