Which of the following is NOT a benefit of a divisional structure?

In a divisional structure, organizations are divided into semi-autonomous units or divisions, each responsible for different products, services, or geographical areas. This setup offers several benefits, which is important to consider when determining the correct answer to the question.

The first benefit, flexibility in response to market changes, arises because each division can quickly adapt to local conditions and customer needs without waiting for central approval. This allows companies to be more responsive and agile in competitive markets.

The second benefit concerns the promotion of divisional managers' specialization. Since divisions operate independently, managers can focus on specific functional areas, enhancing their expertise and ability to make informed decisions relevant to their division's performance.

Thirdly, the divisional structure fosters the development of new product innovations. Each division has the autonomy to explore new ideas and investment in new products tailored to their market segment, thus encouraging creativity and innovation.

In contrast, consolidating all decisions at the corporate level runs counter to the principles of a divisional structure. This approach can lead to a lack of responsiveness, slower decision-making processes, and diminished focus on specific market needs, undermining the advantages that a divisional structure aims to provide. Hence, it is recognized as not being a benefit of this type of organizational structure.