Beyond the initial functional division of the organization, further horizontal differentiation may be required if the firm significantly diversifies its product offering, which takes the firm into different business areas. True or false?

True. Beyond the initial functional division of the organization, further horizontal differentiation may be required if the firm significantly diversifies its product offering, which takes the firm into different business areas.

Often times problems come about due to coordination and control of different business sections if not present. If there are different product offerings, the business sections need to be divided into subcategories to make sure the products are getting the attention they need for differentiation.