Division (business)
{{Short description|Part of an organization}}
{{More citations needed|date=February 2020}}
A division, sometimes called a business sector or business unit (segment), is one of the parts into which a business, organization or company is divided.{{cite book |title=Longman business English dictionary. |date=2000 |publisher=Longman |location=Harlow |isbn=9780582306073 |page=138}}
Overview
Divisions are distinct parts of a business. If these divisions are all part of the same company, then that company is legally responsible for all of the obligations and debts of the divisions.{{cite web |title=Differences Between Wholly Owned Subsidiaries & Divisions |url=https://smallbusiness.chron.com/differences-between-wholly-owned-subsidiaries-divisions-32631.html |website=SmallBusiness.Chron |access-date=17 March 2019}}{{Cite web|last=Picincu|first=Andra|date=August 10, 2020|title=Business Organizational Structure Examples|url=https://smallbusiness.chron.com/business-organizational-structure-examples-20580.html|url-status=live|access-date=2021-10-11|website=Houston Chronicle|archive-url=https://web.archive.org/web/20111229031826/http://smallbusiness.chron.com:80/business-organizational-structure-examples-20580.html |archive-date=2011-12-29 }}
In the banking industry, an example would be East West Bancorp and its primary subsidiary, East West Bank.{{Cite web|url=http://investor.eastwestbank.com/File/Index?KeyFile=397569677|title=East West Bank Press Release First Quarter 2019|date=April 18, 2019|access-date=October 11, 2022|archive-date=September 21, 2019|archive-url=https://web.archive.org/web/20190921142046/http://investor.eastwestbank.com/file/Index?KeyFile=397569677|url-status=dead}}
= Legal responsibility =
{{See also|Subsidiary}}
Subsidiaries are separate, distinct legal entities for the purposes of taxation, regulation and liability. For this reason, they differ from divisions, which are businesses fully integrated within the main company, and not legally or otherwise distinct from it.{{cite book |last1=Lehman |first1=Jeffrey |last2=Phelps |first2=Shirelle |title=West's Encyclopedia of American Law, Vol. 9 | edition=2 |date=2005 |publisher=Thomson/Gale |location=Detroit |isbn=9780787663742 |page=387}}{{Cite web|last=Reed|first=Eric|date=February 12, 2019|title=What Is a Subsidiary and What Do You Need to Know When Starting One?|url=https://www.thestreet.com/markets/corporate-governance/what-is-a-subsidiary-14862236|url-status=live|access-date=2021-10-11|website=TheStreet|language=en-us|archive-url=https://web.archive.org/web/20210131030732/https://www.thestreet.com/markets/corporate-governance/what-is-a-subsidiary-14862236 |archive-date=2021-01-31 }} The Houston Chronicle highlighted that the creation of a division "is substantially easier than developing subsidiaries. Because a division is an internal segment of a company, not an entirely separate entity, business owners create and end divisions at their whim. Also, because individuals in each division are employed by the same company, it's easier to modify staffing to fit with this setup".{{Cite web|date=October 5, 2021|title=Lateral Structural Arrangements in Organizations|url=https://smallbusiness.chron.com/lateral-structural-arrangements-organizations-23406.html|url-status=live|access-date=2021-10-11|website=Houston Chronicle|archive-url=https://web.archive.org/web/20120912072635/http://smallbusiness.chron.com:80/lateral-structural-arrangements-organizations-23406.html |archive-date=2012-09-12 }}