Question

What is departmentalization? Explain departmentalization based on work, products, geography, and customers. Provide an example of each.

Answer 1

Departmentalization is the grouping and structuring of organizational activities into departments for effective coordination and management of operations.

a) Functional departmentalization : Under Functional departmentalization the various departments in the organisation are grouped based on the functions performed. Examples include Production,Finance, Administration,marketing.

b) Product departmentalization : Organisation is grouped by product line and the managers are given authority and responsibility for major product areas in the organization. For example accessories , footware.

c) Geographical departmentalization : In this case organisation is structured based on the geographic lines. such as North, South, northwestern regions.

d) Customer departmentalization:Under Customer based departmentalization grouping is done based on customer’s problem and needs. e.g. wholesale, retail.