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Departmentalization

Departmentalization refers to grouping activities into departments based on certain criteria. There are several types of departmentalization including functional, product, customer, geographic, and process departmentalization. Functional departmentalization groups activities by similar functions, product departmentalization groups by product lines, customer departmentalization groups by type of customer, geographic departmentalization groups by territory, and process departmentalization groups activities by the process or flow of products and services. Many organizations use a combination of these departmentalization methods to structure their activities.

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562 views2 pages

Departmentalization

Departmentalization refers to grouping activities into departments based on certain criteria. There are several types of departmentalization including functional, product, customer, geographic, and process departmentalization. Functional departmentalization groups activities by similar functions, product departmentalization groups by product lines, customer departmentalization groups by type of customer, geographic departmentalization groups by territory, and process departmentalization groups activities by the process or flow of products and services. Many organizations use a combination of these departmentalization methods to structure their activities.

Uploaded by

Areissa James
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Departmentalization

From Wikipedia, the free encyclopedia

Departmentalization refers to the process of grouping activities into departments.


Contents
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1 Types 2 Some theoretical considerations 3 Recent trends in Departmentalization 4 References

[edit]Types Division of labour creates specialists who need coordination. This coordination is facilitated by grouping specialists together in departments. Departmentalization of a personal administration: Functional departmentalization - Grouping activities by functions performed. Activities can be grouped according to function (work being done) to pursue economies of scale by placing employees with shared skills and knowledge into departments for example human resources, IT, accounting, manufacturing, logistics, marketing, and engineering. Functional departmentalization can be used in all types of organizations. Product departmentalization - Grouping activities by product line. Tasks can also be grouped according to a specific product or service, thus placing all activities related to the product or the service under one manager. Each major product area in the corporation is under the authority of a senior manager who is specialist in, and is responsible for, everything related to the product line. LA Gear is an example of company that uses product departmentalization. Its structure is based on its varied product lines which include womens footwear, childrens footwear and mens footwear. Customer departmentalization - Grouping activities on the basis of common customers or types of customers. Jobs may be grouped according to the type of customer served by the organization. The assumption is that customers in each department have a common set of problems and needs that can best be met by specialists. The sales activities in an office supply firm can be broken down into three departments that serve retail, wholesale and government accounts. Geographic departmentalization - Grouping activities on the basis of territory. If an organization's customers are geographically dispersed, it can group jobs based on geography. For example, the

organization structure of Coca-Cola has reflected the companys operation in two broad geographic areas the North American sector and the international sector, which includes the Pacific Rim, the European Community, Northeast Europe, Africa and Latin America groups. Process departmentalization - Grouping activities on the basis of product or service or customer flow. Because each process requires different skills, process departmentalization allows homogenous activities to be categorized. For example, the applicants might need to go through several departments namely validation, licensing and treasury, before receiving the drivers license. Owing to the complexity of tasks and the competitive environment in which organisations operate, they often use a combination of the above-mentioned methods in departmentalization.

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