An organization form in which the major functions of the firm such as production, marketing, R&D and accounting are grouped internally.

Advantages - Enhanced coordination and control, centralized decision making, more efficient use of managerial talent

Disadvantages - difficult to establish uniform performance standards, may lead to short term thinking/performance

sometimes called the multidivisional structure is organized around products, projects, or markets.

Each division is relatively governed by a central corporate office.

e.g. General Motors - five major product divisions (Cadillac, Buick, Oldsmobile, Pontiac, and Chevy)