What is considered a disadvantage of grouping functions by divisions?

Grouping functions by divisions can lead to increased layers of management, which is a notable disadvantage of this organizational structure. When a company is structured into divisions based on product lines, geographical areas, or markets, each division often requires its own management team. This can create additional hierarchical levels within the organization, which can slow down decision-making processes, increase bureaucracy, and potentially lead to communication issues across different divisions.

The presence of multiple layers of management can also dilute accountability, as responsibilities may become less clear when there are many managers involved. This structural complexity can hinder an organization's ability to respond swiftly to changes in the marketplace, affecting its overall agility and efficiency. While specialization and expertise development are seen as benefits of divisional structures, the downside of increased management layers is significant, making it a critical consideration for organizations when determining their operational strategies.