Answer:
In the given situation, organisation should shift from functional structure to divisional structure as the company wants to diversify, by adding a new product line. The reasons and benefits are
(i) The performance of each unit can be easily assessed.
(ii) New product lines can be easily added without disturbing the existing units.
(iii) Decision making is faster.
(iv) Divisional structures maintain short line of communication with customers and provide better services to them.
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