Which of the following organisational structure is generally adopted by firms to realise the full potential of cost leadership strategies ?

Correct option is B

Introduction: The alignment of organizational structure with business strategy (Strategy-Structure Fit) is essential for operational efficiency, particularly for cost leaders. Correct Answer: U-form structure.
Information Booster:
· U-form structure (Unitary) – This is a functional structure where the organization is divided into specialized departments like production, marketing, and finance.
· It is the most effective for Cost Leadership because it promotes high specialization, centralized control, and economies of scale.
· By grouping similar tasks together, it minimizes redundancy and allows for rigorous cost control across the entire value chain.
Additional Knowledge:
· M - form structure (Multi-divisional) – This consists of several operating divisions, each representing a separate business or profit center. It is better suited for diversification strategies rather than pure cost leadership.
· H - form structure (Holding Company) – This is an organizational framework where a parent company holds a controlling interest in various unrelated subsidiaries. It is the most decentralized and lacks the integration needed for a concentrated cost leadership focus.
· A - form structure – This is generally not a standard recognized term in mainstream strategic management (like U, M, and H forms), often used as a distractor in competitive exams.