Certified Internal Auditor (CIA) Part 3: Business Knowledge for Internal Auditing — Question 114

An organization selected a differentiation strategy to compete at the business level. Which of the following structures best fits this strategic choice?

Answer options

• A. Functional structure.
• B. Divisional structure.
• C. Mechanistic structure.
• D. Functional structure with cross-functional teams.

Correct answer: B

Explanation

The divisional structure is the most appropriate for a differentiation strategy as it allows for flexibility and responsiveness to market demands, facilitating innovation and specialized product development. The functional structure may lead to silos, while a mechanistic structure can hinder adaptability. The functional structure with cross-functional teams offers some benefits but does not provide the same level of market focus as the divisional structure.