Analyse two advantages to CD of changing to a geographical organisational structure.

Mark scheme

Marking points from the official mark scheme (Feb/Mar 2024). The mark or mark type is shown in brackets.

1. A01 Knowledge and understanding: The internal, formal framework of a business that shows the way in which management is linked together, and how authority is passed through the organisation.
2. A01 Knowledge and understanding: Structure based on geographical area in which each division is self-contained with its own functional areas.
3. A01 Knowledge and understanding: Benefits of a geographical structure: Better customer service.
4. A01 Knowledge and understanding: Benefits of a geographical structure: More responsive to changing local needs.
5. A01 Knowledge and understanding: Benefits of a geographical structure: Measure the performance and profitability of each division separately.
6. A01 Knowledge and understanding: Benefits of a geographical structure: Greater focus on specific market segments.
7. A01 Knowledge and understanding: Benefits of a geographical structure: Improved customer communication.
8. A01 Knowledge and understanding: Benefits of a geographical structure: Quicker decisions.
9. A01 Knowledge and understanding: Benefits of a geographical structure: Reduce costs of production.
10. A01 Knowledge and understanding: Benefits of a geographical structure: Competition between geographic units.
11. A01 Knowledge and understanding: Benefits of a geographical structure: Preparation of managers in geographic units for promotion.
12. AO2 Application: CD's expansion to country C in 2022 is not yet profitable.
13. AO2 Application: Plans to open factories in two new countries.
14. AO2 Application: Current plans to export to three new countries.
15. AO2 Application: Ambitious plans for further international expansion.
16. AO2 Application: Comment on current hierarchical functional structure.
17. AO3 Analysis: Different international markets may have differing needs in terms of the product, pricing and promotion. A geographical structure can respond more effectively to those needs and thus increase sales.
18. AO3 Analysis: Facilitates the establishment of companies' business units at different local as well as regional levels. This enables regional managers to better understand local needs, preferences, and tastes. As such, they can make relevant products and better satisfy customers and thus increase sales.
19. AO3 Analysis: A geographical structure can promote improved communication between the local customers and local divisions of the business. Such local divisions can better interact with local customers and create value for the business resulting in an increase in profitability.
20. AO3 Analysis: Enables local managers to make prompt decisions without the consent of the central management. Quick decision-making enables CD to serve the right customers at the right time resulting in increased sales.
21. AO3 Analysis: May enable CD to better estimate the demand of the local customers and as such it helps to reduce the cost of overproduction and wastage of raw materials leading to an increase in profits.