Organizational Departmentalization Management

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Q2: Why different forms of department required for an organization? Explain in detail which departments are more important.                                                                       

Answer:

Departmentalization is the basis on which the jobs that are divided due to work specialization are grouped together into logical units, the group is based on common aspects of the job that can be coordinated and evaluated, and there are different techniques of departmentalization.

1)      Functional departmentalization:

 Is when jobs are grouped according to activities or its function. It is very common form of departmentalization, functional departments usually include marketing, sale, human resources department, finance departments respectively. The advantage is that workers specializing in the tasks are put together.

Example: Shell is divided along various departments such as marketing department, project development, training and research, human resource department, finance management department and operational department.

2)      Geographical departmentalization:

 Refers to when the organization is divided with respect to different areas of geography served by the business. It is usually opted in multinational firms or firms that have operations in different regions of the same country.

3)      Product departmentalization:

 Product or service departmentalization is when the organization is divided on the basis of different products or service created by the firm, this helps to focus on specific product line efficiently.

Example: Insurance companies usually departmentalize along different service s such as a life insurance department, a fire insurance department, an accident and health department, liability department and others.

4)      Process departmentalization:

 Is when the organizations is divided according to different process used in creating a product or service of the business. It is used when different process requiring different machinery and skills to make a product are used in business.

Example: In the insurance companies, to claim insurance for an accident we have to pass through many departments to complete a process. First the application department takes the application followed the survey department that survey the accident then the payment process department.

5)      Customer departmentalization:

 Is when the organization is divided to offer their service or products to separate identifiable customer group. It is used when the firm caters to the needs of separate customer categories.

Example: Nike the sports goods manufacture divides its product line into customer categories such as professional athletes, amateur athletes, male athletes, woman athletes. And therefore have divisions that caters to the needs of these separate customer group.