Kiran industries is a company manufacturing office furniture. The company chose to diversify its operations to improve its growth potential and increase market share. As the project was important many alternatives were generated for the purpose and were thoroughly discussed among the member of the organisation. After evaluation the various alternatives Mr. Sukhvinder the managing director of the company, decided that they should add 'Home Interiors' and Furnishings' as new line of business activity.
(a) Name the framework which the diversified organisation should adopt to enable it to cope with the emerging complexity? Give one reason in support of your answer.
(b) State any two limitations of this framework.
The famework with which the organisation should work is functional structure of organisation because of its diverified activities and its production in only one type of product. Two disadvantages are: 1) It gives more importance to functional objectives rather than organisational objectives. 2) It creates delay in communication if the departments are large and expanded.
