Disadvantages of the divisional approach are: - 1. In the multidivisional structure, the subsidiaries benefit from the use of the brand and capital of the parent company. Multi-divisional structures can be costly. Advantages & disadvantages of divisional structures Advantages . Common disadvantages of this structure include operational inefficiencies from separating specialized functions – for example, finance personnel in one division do not correspond with those in another division. The culture of the organization can assist individuals to better communicate with each other. They insulate divisional managers from other divisional managers thus inhibiting their ability to coordinate activities, share resources, and learn from each other. Advantages & disadvantages of divisional organizational structure Chris Joseph - Updated February 06, 2018 Large companies that serve a varied customer base or operate in a number of geographic regions may choose to operate with a divisional structure. One of the disadvantages of divisional structure design is that they divide _____, _____, and knowledge. A) land, buildings B) assets, structures C) people, resources Disadvantages of divisional structure can include operational inefficiencies from separating specialized function. Disadvantages - A divisional structure also has a few weaknesses. Advantages and Disadvantages of Functional Organizational Structure In this type of organization, the emphasis is on managing some functions wherever the function may be performed in the enterprise. One person, alone, can start and run a small business, but when two or more people come together to accomplish a business goal, an organization is formed. Additionally, companies use more financial resources for distribution, printing and other expenditures when employing a multi-divisional structure. Divisional Structure: The second basic structural form employed by organizations is the divisional structure. It also enables to build bonds among them. It should also be noted that a number of experts, studying different types of organizational structures, tend to treat the divisional structure as a kind of traditional bureaucratic structures (Henry, 2007). While growth through expansion of same line of business forces an organization to organize on functional basis, growth through geographic and product diversification necessitates the adoption of divisional structure. Should the company want to diversify further, it is easy to 'bolt on' another division. The divisional structure enables a division to continue in this sort of culture. Consequently, labour expenses can be higher. Functional Vs. Divisional Organizational Structure. 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