Question

principles of management -business 137-describe the five types of departmentalization

Answer 1

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Departmentalization is a process which groups different activities involved in an organization into different departments. The five forms of departmentalization are:

1. Functional: In functional departmentalization, organization is grouped based on the functions being carried out by them. For example, in a firm like Amazon, there are different functional bodies like marketing, finance, accounting, HR etc. All the above mentioned departments carry out their functions separately.

2. Product: In product departmentalization, organization is grouped based on the product line. Tasks which are specific to a good or product are grouped together and are managed under one manager. LA Gear Company is the best example for product departmentalization, as the company's structure is based on the various product lines which the company sells like women's footwear, clothing etc.

3. Geographical: In geographical departmentalization, organization is grouped based on the geographical locations. This works well for a large multi-national company which has its branches all over the world. Coco-Cola Company uses geographical departmentalization by carrying operations in geographic areas: North America and all over the world.

4. Process: In process departmentalization, organization is grouped based on the role they play in the production process of a service or a product. For example, Antex Knitting Mills which is knitting, printing, dyeing and finishing company. Knitting, printing and dyeing and finishing are different activities involved in the production flow.

5. Customer: In customer departmentalization organization is grouped based on the common customers or the types of customers the firm is dealing with. The best example for customer departmentalization is Amazon, which has both domestic and foreign customers and the customer service of the company deals separately with domestic and foreign customers.