Organizational effectiveness is influenced by the degree to which its members are able to coordinate their efforts in a unified manner. The structure needed for coordination may be different at the organization’s beginning than later in its life. Describe the principal differences between a functional structure and a multidivisional structure. Discuss why a company may change from a functional to a multidivisional structure.

REAL LIFE APPLICATION: Should the structure of an organization change over time? What other factors might influence the change of the structure of an organization?