Final answer:
Divisional structures in business create internal competition for resources, which can lead to inefficiencies and conflicts that negatively affect the company's performance. This is similar to external global competition, where companies strive to outperform each other, influencing internal dynamics within an organization.
Step-by-step explanation:
Divisional structures in business are configured such that different divisions within a company are responsible for their own operations, product development, and profitability. While this allows for specialization and can improve efficiency, it may also lead to internal competition for resources. Competition for resources among divisions can be problematic, as it may inhibit cooperation and lead to conflicts that undermine the organization's overall performance.
As an example, in the military sector, despite a strategic long-term planning capability, there is an inherent design to win the day in a global resource competition, which often results in a quest for control through force or strategic superiority. Likewise, in business, divisions may push to control resources to outperform their peers, rather than collaborate. This internal competition, similar to the competition among firms in a global marketplace, can be damaging to the collective interests of the company.
Globalization and new communications and information technologies have amplified competition by introducing more players from other regions and countries, further challenging firms to be competitive and agile. This heightened level of external competition can often reflect internally, pressuring divisions to achieve more with potentially less, thereby exacerbating the struggle for resources within a company.