Association of Chartered Certified Accountants (ACCA) Certification Practice Test

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Which factor is important for a division's success within a divisionalised structure?

Absolute reliance on headquarters
Potential for growth in its area of operations
Minimal need for management oversight
Uniform product offerings across all units

The correct answer is: Potential for growth in its area of operations

The factor that is crucial for a division's success within a divisionalised structure is the potential for growth in its area of operations. This is important because divisions often operate as semi-autonomous entities with their own objectives and strategies that are aligned to maximize their specific market opportunities. A division with significant growth potential can drive revenue, keep the organization competitive, and attract investments. It encourages innovation and responsiveness to market changes, which are significant aspects of a divisionalised structure where different divisions may operate in varying markets or sectors. The potential for growth can motivate the division to leverage its resources more efficiently and can lead to improved performance metrics, making it essential for the overall success of the organization. In contrast, reliance on headquarters may hinder a division's autonomy, management oversight might be too restrictive for fostering operational agility, and uniform product offerings could stifle a division's ability to tailor its offerings to meet local market needs.