Divisional structure: what it is and what it means

The divisional structure is an organizational model that groups people by business unit, product, geographic area or customer segment: each division has its own internal functions. Coordination is horizontal within the division and vertical toward central management. Each division operates with its own autonomy and with a separate P&L that can be attributed distinctly.

Distinctive: by business unit
Distinctive: separate P&L
Essential: its own internal functions
Essential: vertical toward central management
Constant: its own autonomy
Constant: attributed distinctly

Glossary

Divisional structure

An organizational model that groups people by business unit, product, geographic area or customer segment, with each division having its own functions and operational autonomy.