Divisional structure is suitable for larger organizations covering huge geographic areas and different types of market areas. Considering Nestle as an example, it operates in many countries being a multinational company. To carry out successful business, Nestle has made various divisions like Europe division, middle east division etc. Each division is to control all the Nestle supplying stores of its particular area.

This makes it easier for the head office to control each area and get batter results. Such structures meet all the needs in a quicker rate. However, the communication problems still lie since each division is of a total different area. Apart from being effective, divisional structure is a costly one due to its large size. It can also be used in small scale businesses like small shops with several outlets etc but its suits large scale businesses the most.