Question

reference organization chart 3.1:

which of the following is correct?

• the structure is divisional.
• the structure is primarily functional.
• the customer accounts section should be dissolved and made to report to marketing.
• hierarchical referral is the best means for coordination in this organization.

Explanation:

🆕 New Concept Discovered: Organizational Structures
How companies group their activities and departments

Step 1: Analyze the organization chart

Looking at Reference Organization Chart 3.1, we see the organization is divided directly under the President into three main departments:

• VP Customer Accounts (handling client relations)
• VP Operations (handling production across different media)
• VP Marketing (handling research and sales)

These departments are grouped by specialized organizational functions (Customer Accounts, Operations, and Marketing) rather than by specific products, geographic regions, or unique customer segments (which would represent a divisional structure).

Step 2: Evaluate the options

• "The structure is divisional."
• Incorrect. A divisional structure groups activities based on specific products, services, geographic areas, or distinct customer markets. Here, the primary divisions are functional departments.

• "The structure is primarily functional."
• Correct. A functional structure groups employees based on their specific skills, expertise, and job roles (e.g., marketing, operations, accounts). This matches the chart perfectly.

• "The customer accounts section should be dissolved and made to report to marketing."
• Incorrect. There is no evidence or business context provided in the chart to suggest this structural change is necessary or beneficial.

• "Hierarchical referral is the best means for coordination in this organization."
• Incorrect. While hierarchy exists, relying solely on hierarchical referral (sending every issue up the chain of command) is generally inefficient for coordination in dynamic environments like advertising agencies.

Answer:

The structure is primarily functional.