In a divisional structure, how are employees primarily grouped?

In a divisional structure, employees are primarily grouped by product line. This organizational structure is designed to allow each division to operate semi-autonomously and focus on a specific product or service. By organizing employees in this way, each division can specialize and tailor their strategies, operations, and performances to best meet the needs of the particular products they handle. This approach enables increased flexibility and responsiveness to market changes, as well as fostering innovation within each product category. Divisional structures can enhance accountability as each division is responsible for its own performance metrics, including sales, profits, and other key operational outcomes.

While geographical location, customer type, and function are valid ways to organize teams, they typically represent different organizational models such as geographic divisions, customer-centric divisions, or functional divisions, respectively. In a divisional structure focused on product lines, the emphasis is placed on the complete lifecycle of the product, from development through sales and marketing, allowing for a concentrated focus on specific market segments and demand.