Departmentalization

10 Key excerpts on "Departmentalization"

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  Managing Fashion

  A Management Perspective

  • Kaled K. Hameide(Author)
  • 2020(Publication Date)
  • Taylor & Francis

    (Publisher)

  2. Departmentalization. Once jobs are divided up through specialization, they have to be grouped together so that common tasks can be coordinated. This process is referred to as Departmentalization. For example, under the “production” department there are different jobs or functions that need to be done such as creative, assembly, fnishing, etc. This is an example of functional Departmentalization (i.e. a department based on activities or functions). Departmentalization does not always have to be based on function. For instance, it could be based on product. A product department groups all jobs and functions that relate to a specifc product line (e.g. men’s dress shirts or denim pants, etc.). We could also have geographic departments (North America vs. Asia) or one that is based on similar consumer needs (e.g. joggers vs. swimmers, etc.). In a large organization we could notice the utilization of more than one form of Departmentalization. For example, they could start by departmentalizing based on functions (production, marketing, design, etc.) and then within each of these departments (e.g. production) another level of 14 | UNDERSTANDING MANAGEMENT Departmentalization takes place in the form of functions while within another department (e.g. sales) the division could be geography based (east vs. west coast) and so on. 3. Chain of command. This is defned as the continuous line of authority that extends from upper organizational levels to the lowest levels and clarifes who reports to whom. The word authority is key here as it defnes the inherent rights in each managerial position that allow managers to tell people what to do. 4. Span of control. This refers to how many employees can a manager manage both ef fciently and effectively. Accordingly, it determines the number of managers an organization will end up having.

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  Supervisory Management

  The Art of Inspiring, Empowering, and Developing

  • Donald Mosley, Donald Mosley, Jr., Paul Pietri, , Donald Mosley, Donald Mosley, Jr., Paul Pietri(Authors)
  • 2018(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  What can be done to resolve this dilemma? One solution for many organizations is to shift to smaller, more natural, semiautonomous mini-organizations built around specific products, each with its own functional capabilities. This is known as product Departmentalization, that functional Departmentalization A form of Departmentalization that groups together common functions or similar activities to form an organizational unit. product Departmentalization A form of Departmentalization that groups together all the functions associated with a single product line. EXHIBIT 4-7 Functional Depart- mentalization at the Top Management Level Marketing (Sales) Manager Production Manager Finance Manager President Copyright 2019 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. 10 4 Part 2: Planning and Organizing all the functions associated with a single product line are grouped. In service organiza- tions, all the functions associated with a single service are grouped together. Exhibit 4-8 is an example of product Departmentalization. EXHIBIT 4-8 Example of Product Departmentalization President Product Division 1 Marketing/ Sales Finance Production R & D Product Division 2 Marketing/ Sales Finance Production R & D Product Division 3 Marketing/ Sales Finance Production R & D Types of Departmentalization can vary widely according to the activities being grouped. Sales organiza- tions, for example, often structure groups according to territories. Terry Vine/The Image Bank/Getty Images Copyright 2019 Cengage Learning.

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  Industrial Engineering Foundations

  Bridging the Gap between Engineering and Management

  • Farrokh Sassani(Author)
  • 2017(Publication Date)
  • Mercury Learning and Information

    (Publisher)

  Advantages • It efficiently integrates the main activities required to make a particular product. • It works independently while relying on support from the mother organization. • It allows development of significant expertise as divisions compete to supersede in performance. Disadvantages • It impedes the direct transfer of information and technical knowledge between divisions. • It necessitates duplication of some resources. • Recruiting and retaining capable managers requires effort and can be costly. 2.5.3 Geographic Departmentation The purpose of this form of departmentation is to provide goods and services in the geographical locations where they are required, such as post offices, hospitals, and transit systems that serve communities at dispersed geographical locations. Large corporations can have departments in various cities or countries. Advantages • There is effective provision of goods and services closer to the location of demand. • It provides the opportunity to hire local personnel. Disadvantages • There can be duplication of resources. • The possibility exists for a lack of direct management and support. 2.5.4 Clientele Departmentation Customer or clientele departmentation is used to provide specific goods and services for specific classes of clients, such as children, youth, or adults. ORGANIZATIONAL STRUCTURE 17 Advantages • Specialization and expertise in products and services are possible. • Better relationships with clients can be fostered. Disadvantages • There can be a duplication of resources. • There may be difficulty in maintaining uniform services. 2.5.5 Process Departmentation This form of departmentation is common in some manufacturing plants, where processes of similar nature are grouped together to enhance resource availability and accumulate a greater level of expertise. Advantages • It improves coordination of similar processes. • It allows better decision making and implementation of changes.

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  MGMT

  • Chuck Williams(Author)
  • 2021(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  This is why Verizon also has eight “corporate” functions – finance, communi- cation, social respon- sibility, technology, human resources, strategy,marketing,and administrative/legal/ public policy – that support each of its three customer departments, and avoids the disad- vantage of duplication common to customer depart- mentalization structures. It can be difficult to achieve coordination across different customer departments, as is also the case with product Departmentalization. Finally, the emphasis on meeting customers’ needs may lead workers to make decisions that please customers but hurt the business. 9-1d Geographic Departmentalization Geographic Departmentalization organi-zes work and workers into separate units responsible for doing business in particular geographic areas. Exhibit 9.6 shows the geographic departmentaliza- tion used by AB InBev, the largest beer brewer in St. Louis Mexico City North America Middle Americas South America Europe Middle East and Africa Global HQ/ Europe Zone HQ Zone HQ Asia Pacific São paulo Shanghai Leuven Exhibit 9.6 Geographic Departmentalization: AB InBev Company Source: 2019 Annual Report,” AB InBev, February 27, 2020, accessed April 13, 2020, www.ab-inbev.com/content/dam /abinbev/news-media/press-releases/2020/02/final-full-ab-inbev-annual-report/Full_AB-INBEV%20AR%20EN.pdf. Geographic Departmentalization organizing work and workers into separate units responsible for doing business in particular geographic areas Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.

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  Business Process Improvement Toolbox

  • Bjorn Andersen(Author)
  • 2007(Publication Date)
  • ASQ Quality Press

    (Publisher)

  Soon the extent and complexity of the tasks expanded further, and the number of people in different coordinated enterprises increased. For as long as enterprises with more than a few employees have been in existence, they have probably been organized into departments. It was no longer feasible to maintain a workforce where everybody performed each task. The tasks became so complex that the individual worker had to specialize. Therefore, the logical step was to form departments consisting of individuals with similar areas of expertise. This expanded into a tradition with a solid foothold in all types of organizations—commercial, public, and nonprofit. Until a few years ago, this way of organizing was highly dominant and had completely replaced the original way of aligning the organization more directly according to the work to be performed. Organizing people and work into departments provided, and still provides, some benefits:

  • People were allowed to specialize within their field of expertise, thus developing a highly refined set of skills
  • Such departments could often more easily attract other specialists of the same training
  • Costs from centralizing various functions (for example, finance, personnel, maintenance) were lowered
  • The workplace was more secure; employees knew where they belonged and which tasks they were supposed to perform
  • The organizational structure was more clearly defined and could easily be drawn and presented

  Thus, we can safely claim that at least some modern organizations consist of both functional departments and horizontal business processes (I say “at least” since some organizations, as already mentioned, have completely done away with departments and have organized their employees inside processes). Figure 3.1 depicts a typical organization, with its vertical departments and horizontal processes that run through these departments (Andersen and Pettersen, 1996). Lately it has become obvious that this contradiction between mode of organization and tasks has created several problems.

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  Organizational Behaviour

  • Ray French, Charlotte Rayner, Gary Rees, Sally Rumbles(Authors)
  • 2016(Publication Date)
  • Wiley

    (Publisher)

  Figure 6.5 shows a divisional pattern of organization grouped around products (automotive parts such as transmissions and engines), regions (European, Asia Pacific and South American) and customers (government accounts, corporate accounts and university/college accounts) for three divisions of a large international organization. This pattern is often used to meet diverse external threats and opportunities.

  Figure 6.5 A divisional pattern of Departmentalization for a large international organization.

  Many larger, geographically dispersed organizations that sell to national and international markets use Departmentalization by geography. The savings in time, effort and travel can be substantial, and each territory can adjust to regional differences.

  Divisional Departmentalization

  is the grouping of individuals and resources by product, service and/or client.

  Departmentalization by geography

  is the grouping of individuals and resources by geographical territory.

  Departmentalization by customer

  is the grouping of individuals and resources by client.

  Organizations that rely on a few major customers may organize their people and resources by client. The idea is to focus attention on the needs of the individual customer. To the extent that customer needs are unique, Departmentalization by customer can also reduce confusion and increase synergy. Organizations expanding internationally may also divisionalize to meet the demands of complex host-country ownership requirements.

  The major advantages and disadvantages of divisional specialization are summarized in Table 6.3 . In organizations in which satisfying the demands of outsiders is particularly important, the divisional structure may provide the desired capabilities. This pattern can help improve customer responsiveness for organizations that operate in many territories, produce quite different products and services, serve a few major customers or operate internationally.

  Table 6.3

  Major advantages and disadvantages of divisional specialization.

  Advantages	Disadvantages
  1. It provides adaptability and flexibility in meeting the demands of important external groups	1. It does not provide a pool of highly trained individuals with similar expertise to solve problems and train new employees
  2. It allows for spotting external changes as they are emerging

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  Management

  • Ricky Griffin(Author)
  • 2021(Publication Date)
  • Cengage Learning EMEA

    (Publisher)

  Many college students, for instance, must register in sequence: seniors on Monday, juniors on Tuesday, and so on. Other areas that may be organized in sequence include credit departments (specific employees run credit checks according to customer name) and insurance claims divisions (by policy number). Other Considerations Two final points about job grouping remain to be made. First, departments are often called something entirely different—divisions, units, sections, and bureaus are all common synonyms. The higher we look in an organization, the more likely we are to find departments referred to as divisions. Kraft Heinz, for example, is organized into five major divisions. Nevertheless, the underlying logic behind all the labels is the same: They represent groups of jobs that have been yoked together according to some unifying principle. Second, almost any organization is likely to employ multiple bases of Departmentalization, depending on level. Although Apex Computer is a hypothetical firm that we created to explain Departmentalization, it is quite similar to many real organizations in that it uses a variety of bases of Departmentalization for different levels and different sets of activities. Finally, as illustrated in our Tech Watch feature, new economy businesses have to focus on new ways to create structure. location Departmentalization Grouping jobs on the basis of defined geographic sites or areas This shift of factory workers is leaving the plant floor. They have just been relieved by the second shift crew. Sean Gallup/Getty Images PART 4 | The Organizing Process Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience.

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  Organization

  A Guide To Problems and Practice

  • John Child(Author)
  • 1984(Publication Date)
  • SAGE Publications Ltd

    (Publisher)

  The product organization appeared to enhance the plant's adaptive capability largely by improving the integration between functions. In stable conditions, when there is time enough to achieve co-ordination through written communications and other formalized methods, the functional structure may be advantageous. In conditions demanding some change and active problem-solving a product form may prove superior because it encourages more intensive communication, confrontation of issues and integration of effort. If the direction of this change is, however, towards a contraction of activities and/or towards cost reduction, a move back to a functional structure would have to be considered (an example is given on page 97 below). Divisionalization Larger and diversified organizations today usually draw the boundaries around their main subdivisions in terms of a product or geographical logic, depending on whether they have diversified primarily by increasing their range of product types or by increasing the range of geographical regions in which their operations are located. Some organizations that have diversif ied in a major way along both these axes have adopted a grid structure, which incorporates both logics for grouping activities with corresponding multiple reporting lines-these are discussed in the next section. Major product or geographical area-based units within an organization are normally designated as divisions. The divisional form of structure, as it developed in the United States, had three prime characteristics. First, profit responsibility was assigned to general managers of divisions which became essentially self-contained busi-ness units. Second, the corporate headquarters had a general office that was mainly concerned with strategic planning, appraisal of policies and projects and overall financial control, including the allocation of resources between the divisions.

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  The World of Work

  Industrial Society and Human Relations

  • Robert Dubin(Author)
  • 2017(Publication Date)
  • Taylor & Francis

    (Publisher)

  1

  Usually, these distinctive operations of a firm are organized into separate groups called divisions, branches, departments, sections, or units. In Chart 5.1 we have a typical picture of the separate broad operations of a business, divided into departments whose titles describe the operations involved.

  This is the horizontal division of labor. It is the first division of labor to be noted on entering a work organization. Operations are classified by departments whose designation generally reveals the special operations carried on in them. A customer wanting to buy some goods knows he must go to the sales department for service. A salesman trying to sell the company some new machine tools knows that he can do his business with the purchasing department. A job seeker knows he must go to the personnel department to apply for work. A foreman needing repairs on a machine will call the maintenance department.

  There is no theoretical limit to the extent to which operations can be specialized in departments. Indeed, it is one of the characteristics of large scale organizations that they exhibit growth by continual specialization of the horizontal division of labor.

  Extension in the horizontal division of labor takes place in one of two ways. A given department may have an operation carried on in it that, over a period of time, takes more and more attention of a growing number of people. When the operation is continuous enough, and the group is large enough, a supervisor is appointed and the group is given independent designation as a unit, section, or department.

  CHART 5.1

  HORIZONTAL DIVISION OF LABOR SPECIALIZES OPERATIONS

  The second manner of growth in the horizontal division of labor is to start a new operation. This operation may gradually grow in the amount of time devoted to it until it, too, is given independent status as a unit, section, or department. When this growth in the horizontal division of labor is rapid, it may become the vehicle for opportunists in the organization to seek supervisory positions, or to make more important their present positions of supervision. This is popularly called “empire building” when it exceeds the actual needs of the organization, and when it results from a desire for personal aggrandizement.2

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  Federal Departmentalization

  A Critique of Theories of Organization

  • Schuyler C. Wallace(Author)
  • 2019(Publication Date)
  • Columbia University Press

    (Publisher)

  I l l . • QUANTITATIVE CONSIDERATIONS IN Departmentalization THE UTILIZATION OF THE PRINCIPLE OF DEPARTMENTALI-zation in the administrative branch of the government immediately raises the problem of the number and size of the departments to be created. This, in turn, raises several subsidiary questions. Important among these is the relation which the departmental structure should bear to the chief executive, the influence that structure may exert both upon the character of the departments established and upon the quality of their management, the effect it may have upon the chief executive's cabinet and, finally, its influence upon administrative-legislative relations. The essential purpose of the technique of departmentali-zation is, as we have already indicated, the diffusion of supervisory authority in such a way as to relieve the chief executive of an otherwise intolerable administrative burden, and the creation of a mechanism of coordination adequate to the exigencies of administration. 1 One of the primary considerations in the development of a departmental structure involves the number of admin-istrative subordinates a chief executive is capable of handling, for just as the hands of man can span but a 1 In connection with this and the two succeeding chapters, the author wishes to acknowledge his indebtedness to Luther Gulick whose Notes on the Theory of Organization ( Papers on the Science of 40 Q U A N T I T A T I V E C O N S I D E R A T I O N S limited number of notes on the piano, so the mind and will of man can span but a limited number of managerial con-tacts.

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