Under what conditions would you reasonably consider a divisional structure by product line, with each product-based Business Unit responsible for its own profit and loss (P&L)?

(A) Not all product lines are sold in every country

(B) The different product lines require their own specific sales channels because they are treated very differently by hospital procurement, but development and manufacturing of the different product lines is similar

(C) Never, a divisional structure by product line is simply not going to be suitable for this type of business

(D) The different product lines are so distinct that they require their own specific development teams, manufacturing processes, and sales channels

Explanation

A divisional structure by product line, with each product-based Business Unit responsible for its own profit and loss, can be considered only if the different product lines are so distinct from others that they require their own specific development teams, manufacturing processes, and sales channels. Each product line will have its own dev team, manufacturing process and sales team, and channel.

Conclusion

This question is a part of the Weekly Quiz 3 section from the Organisational design: Know your organisation course. You can check out all the quiz answers to this exam in our Organisational design: Know your organisation Quiz Answers page.

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