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16. M/s. SPG is a multi-product multi-business enterprise. It has four prominent divisions. Each division functions as an independent product center with its own set of activities managed by respective division head, which is responsible for its own performance and profitability. This organizational structure is known as:

Options

ADivisional structure
BMulti divisional structure
CStrategic Business Unit
DNetwork structure
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Correct Answer

Option ADivisional structure

All Options:

  • ADivisional structure
  • BMulti divisional structure
  • CStrategic Business Unit
  • DNetwork structure

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Detailed Solution & Explanation

**Correct Answer: Option A — Divisional Structure**

**Explanation:**

M/s. SPG is described as a multi-product, multi-business enterprise with **four divisions**, each functioning as an **independent product centre** managed by a respective division head who is responsible for the division's own performance and profitability.

This precisely describes a **Divisional Structure**, where the organisation is divided into semi-autonomous units (divisions) based on products, markets, or geographies. Each division operates like a self-contained business with its own functional departments and a dedicated manager who is accountable for results.

**Why not the other options?**
- **Option B (Multi-divisional structure):** While superficially similar, the 'M-form' or multi-divisional structure is a more formal academic term referring to a corporate structure where divisions are managed by a central corporate HQ that coordinates and controls—the question's description emphasises independence, pointing squarely to divisional structure as the textbook term used in CA Inter syllabus.
- **Option C (Strategic Business Unit):** An SBU is a grouping of related divisions managed together for strategic planning purposes; it is not the same as each division acting as an independent product centre.
- **Option D (Network structure):** A network structure involves a loose, flexible web of independent organisations or units linked by contracts or alliances, which does not match the description.

Hence, **Option A** is the correct answer.

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