Departmentalization Notes for MBA Students
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.
The Departmentalization is the efficient and effective grouping of jobs into meaningful work units to coordinate numerous jobs all for the expeditious accomplishment of the organization’s objectives.
Two particular things need to consider before setting the formal structure of the organization or the departmentalization.
They are- basic organizational units and coordinating structures.
Objectives of Departmentalization:
- To specialize activities.
- Simplify the process and operations of the organization
- To maintain control
Departmentalization of activities results in the increase in efficiency of the management and ultimately the enterprise. It is helpful in fixing responsibilities and accountability.
Types of Departmentalization:
An organizational structure and design are shaped significantly by the Departmentalization followed.
The means of Departmentalization are by-
- Functional Departmentalization.
- Departmentalization by Territory.
- Departmentalization of the organization by customer group.
- Matrix departmentalization.
- Planning Task Force.
1- Functional Departmentalization
Functional departmentalization groups together jobs which are involving the same or similar activities. It allows the organization to staff all important positions with functional experts and facilitates coordination and integration.
2-Departmentalization by Territory
Departmentalization by Territory method is followed where; unless to local conditions appear to offer advantages, such as low cost of operation and opportunities to capitalize on attractive local conditions as they arise.
Territorial departmentalization is especially popular for sales where division appears feasible according to some geographic market segregation.
3-Departmentalization of the organization by customer group.
Customer departmentalization is where the organization’s activities are ready to respond to and interact with specific customers or customer groups.
This organizational form is used when great emphasis is placed on effectively serving different customer types.
4-Matrix departmentalization
Matrix departmentalization attempts to combine functional and task force (project) departmentalization designs to improve the synchronization of multiple components for a single activity (i.e., a moon launch), to improve the economics of scale, and to better serve the customer and company.
5-Planning Task Force
The planning task force is most often formed when the organization requires addressing special circumstances. It is more preferable, and efficient than maintaining a different planning staff or department.
The choice of departmentalization basis is influenced by the factors such as the degree of specialization, coordination, control, cost consideration, adequate attention to key areas, etc.
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