Association of Chartered Certified Accountants (ACCA) Certification Practice Test

In geographic departmentation, where is day-to-day operational control primarily centered?

1. At the product line level

2. At the functional level

3. At Head Office

4. On a territorial basis

The correct answer is: On a territorial basis

In geographic departmentation, operational control is primarily centered on a territorial basis. This organizational structure divides the company according to different geographic regions, allowing each territory to operate somewhat independently. Each region is staffed with its own management team responsible for local decision-making, marketing, sales, and customer service. This decentralization empowers regional managers to respond quickly to local market conditions, cultural differences, and customer preferences, leading to increased efficiency and effectiveness in meeting the demands of the regional market. Each territory can tailor its strategies and operations to better align with the specific needs and characteristics of the local consumer base, thus enhancing overall business performance in various geographic locations.