In the multidivisional structure, each business in which the firm engages is managed through a division. Different firms have different names for these divisions - strategic business units (SBUs), business groups, or companies. Whatever their names, the divisions in an M-form organization are the true profit and loss centers: Profits and losses are calculated at the level of division in these firms.
This is typically the best structure for companies to follow because it allows for the segmentation of divisions to view accurately the profitability of each sector. If things were not segmented in this fashion, it would be difficult to see where financial disparities lie. Also, segmentation allows for a much easier time in governing and delegating responsibilities as the restaurant chain continues to expand.
The hierarchy of this structural system usually headed by the board of directors (please see below for specifics regarding Chipotle), Senior Executive Management Team, Business Operations (Finance, Accounting Human Resources, Legal, etc - who are responsible for facilitating activities that aid in the business system), and General Managers. While this is not the only organizational structure, this is certainly the most successful and fitting of this particular company.
At the top, the board of directors acts as an intermediary between the shareholder and executive management to ensure sounds decision are made for the company at the organizational level. The executive management team makes all of the higher level decisions regarding the direction of the company. Business Operations acts as an information acquiring and organizational entity that maintains the administrative dealings of the company. General Managers are responsible for carrying out the operational objectives set forth by upper management.
Chipotle Investor Relations
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