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Ms West has just purchased a designer clothing and manufacturing company - VCE - SSCE Business Management - Question 3 - 2010 - Paper 1
Question 3
Ms West has just purchased a designer clothing and manufacturing company. She would like to expand the company and start exporting. Compare and contrast two potenti... show full transcript
Worked Solution & Example Answer:Ms West has just purchased a designer clothing and manufacturing company - VCE - SSCE Business Management - Question 3 - 2010 - Paper 1
Step 1
Compare and contrast two potential management structures
Answer
The two potential management structures that could assist Ms West are the Divisional Management Structure and the Functional Management Structure.
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Divisional Management Structure:
- In this structure, employees are organized based on specific divisions such as product lines or markets. For example, Ms West could have divisions for men's clothing, women's clothing, and children's clothing.
- Advantages: This structure allows for specialization and focused strategies for each division. It can enhance flexibility and quick decision-making since each division operates independently.
- Disadvantages: However, it can lead to duplication of resources across divisions and potential inconsistencies in company policies.
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Functional Management Structure:
- A functional structure organizes employees based on their skills and expertise, such as HR, Finance, and Marketing.
- Advantages: This structure promotes efficiency within specialized departments and effective deep skill development. It can lower operational costs as roles are consolidated.
- Disadvantages: On the downside, it may lead to poor inter-departmental communication and might not be as responsive to market changes as divisional structures.
Overall, while both structures have their strengths and weaknesses, the choice depends on the strategic goals of Ms West’s company.
Step 2
Which management structure would you recommend to Ms West? Justify your choice.
Answer
I recommend the Divisional Management Structure for Ms West. Given her ambitions to expand the company and begin exporting, this structure offers the flexibility and responsiveness necessary to meet diverse market demands.
- Each division can tailor its strategies based on consumer preferences and trends in its specific market segment, thus enhancing customer satisfaction and competitiveness.
- It allows Ms West to quickly adapt to changes, such as launching new product lines or entering new geographical markets, which is essential for achieving her expansion goals.
- Furthermore, a divisional structure would enable her to foster strong brand identities for each line while ensuring efficient allocation of resources to each, supporting growth in a dynamic environment.
In conclusion, the divisional structure aligns well with her strategic objectives, promoting both specialization and agility in expanding her designer clothing brand.