Association of Chartered Certified Accountants (ACCA) Certification Practice Test

What is a primary advantage of product/brand departmentation?

1. Increase in overheads

2. Accountability

3. Managerial complexity

4. Failure to share resources

The correct answer is: Accountability

The primary advantage of product/brand departmentation lies in accountability. This structure allows each product or brand to be managed as a distinct entity, providing clear responsibility for performance outcomes. When departments are organized around products or brands, managers can focus specifically on their assigned area, enabling them to make informed decisions and tailor strategies that drive success. This clear delineation helps in establishing performance metrics, monitoring results, and implementing improvements more effectively. In contrast, options like an increase in overheads can often be a concern with departmentalization because establishing separate departments can lead to higher operational costs. Managerial complexity can arise as each department can become quite specialized, potentially leading to challenges in coordination and communication. Lastly, the failure to share resources highlights a drawback of this system, as departments might operate in silos, leading to inefficiencies and missed opportunities for collaboration. Thus, the aspect of accountability stands out as the core benefit, enhancing focus and performance tracking for each product or brand.