2. DEFINITION
Departmentalization is an organizational structure that separate
people into groups , or departments . Based on a particular set of
criteria . These departments have their ow leadership and work
together to complete tasks . With large or complicated projects ,
multiple departments may work together .
Primary objectives :
Maintaining control
Simplifying operational processes
Grouping specialized activities
Increasing overall efficiency
Ensuring responsibility
4. FUNCTION
Organizations that form departments by function separate
employees based on the type or subject of work they perform .
This allows professionals with similar areas of expertise to
communicate & collaborate with each other . Three function
departments are production , marketing , & finance
PRODUCT
some companies with more than one product may sort their
departments by the item that teams work on
Larger companies often have more products , so they’re more
likely to use this type of departmentalization
5. PROCESS
Process departmentalization groups people by where in the
production process their work usually occurs .
Ex: a toy company may have department for ordering the raw
materials , one for building toys & 3rd department for
transporting them (production companies )
MARKET
Market departmentalization is when an organization forms its
departments based on what market it’s targeting
Markets are large groups of customers that may have unique
needs .
Ex: life insurance company
6. CUSTOMER
If a company has a particular customer that gives them
lot of business , they can create a department
specifically for that customer ,
Ex: if canned beans production company sells to 5
major grocery stores , they may have a department for
each store .
This is a common type of organizational structure for
contracting & some production companies
7. LOCATION DEPARTMENTALIZATION
LOCATION DEPARTMENTALIZATION creates group
based on general geographical area . This area
can either be the location of the company or of
their clients .
Ex: telemarketing company can make
departments depending on which state their tele
marketers target
