Departmentalization is defined as “the process of grouping jobs according to some logical arrangement,” (Griffin, 2013, page 300). That is to say, departmentalization satisfies the organizational need for the appropriate distribution of employees according to some unifying principle. There are a lot of different synonyms for “department,” such as units, sections, bureaus, or divisions. It is important to understand that any given organization may employ various methods of departmentalization. A few of the common methods of departmentalization are outlined below. Source: Common Approaches to DepartmentalizationCustomer DepartmentalizationCustomer departmentalization is defined as “grouping activities to respond to and interact with specific customers or customer groups,” (Griffin, 2013). The primary advantage of customer based departmentalization is that organizations can better serve their customers by grouping skilled specialists to engage in customer interactions.
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However, a large administrative staff may be required to facilitate various departments within an organization that uses customer departmentalization.Functional DepartmentalizationDefined as “grouping jobs involving the same or similar activities,” (Griffin, 2013) functional departmentalization offers multiple advantages. Individual departments can employ experts in the specific area and interdepartmental activities are easier to facilitate. The major drawbacks of functional departmentalization are that bureaucracy and departmental tunnel-vision may begin to develop.Location DepartmentalizationLocation departmentalization is defined as “grouping jobs on the basis of defined geographic sites or areas,” (Griffin, 2013). Depending on the organization and the nature of the product, the department may serve a relatively large or minute locale. That being said, the primary reason an organization would chose to departmentalize based on location is to better serve customers or react to environmental characteristics of a region.Product DepartmentalizationThis type of departmentalization is defined as “grouping activities around products or product groups,” (Griffin, 2013). Many large organizations incorporate product departmentalization in order to more easily coordinate activities associated with a product or product line, increase decision making effectiveness, and easily define accountability associated with the product or products.
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Management and planning tools Ronald P. Anjard The author Ronald P. Anjard is President of AIC (Anjard International Consultants), San Diego, USA. Abstract There are now many tools to assist in developing increased overall quality and supporting total quality management. These management tools are now recognized as valuable – often essential. Departmentalization by Simple Number, Departmentalization by Enterprise Function, Departmentalization by Territory or Geography, Customer Departmentalization, Process or Equipment Departmentalization, Departmentalization by Product, Matrix Organization, Guideline for Making Matrix Management Effective.
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However, this type of departmentalization also tends to produce a tunnel-vision effect when members of the department focus too closely on departmental goals and strategies, rather than organizational goals and strategies.This figure serves as an example of the various approaches to departmentalization.
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