Functional departmentalization involves dividing an organization into departments based on their functions, such as production, sales, marketing, accounting, and human resources. This structure can increase efficiency by allowing groups to specialize in their tasks and develop expertise. However, coordination between departments can be difficult and slower decision making may occur as managers focus narrowly on their department's function.

1. FUNCTIONAL
DEPARTMENTALIZATION

2. WHAT IS DEPARTMENTALIZATION?
• Departmentalization involves
dividing an organization into
different departments, which
perform tasks according to the
departments' specializations in
the organization.
Departmentalization as a means
of structuring an organization
can be found in both public and
private organizations.

3. FUNCTIONAL DEPARMENTALIZATION
In functional departmentalization, an organization is organized
into departments based upon the respective functions each
performs for the organization. For example, a manufacturing
company may create a production department, sales and
marketing department, an accounting department, and human
resources department. Functional departmentalization may be
advantageous because it can increase efficiency and expertise
since all related activities are performed in one place by one
group of people that specialize in that activity.

5. FUNCTIONAL DEPARMENTALIZATION OF
ADVANTAGES
• Creates highly skilled specialists.
• Lowers costs through reduced duplication.
• Communication and coordination problems are lessened.

6. FUNCTIONAL DEPARMENTALIZATION OF
DISADVANTAGES
•Cross-department
coordination can be
difficult
•May lead to slower
decision making
•Produces managers with
narrow experiences