Departmentalization is the process of grouping jobs based on common bases, such as task types, functionality, or other guidelines determined by the organization’s objectives. The four primary bases of departmentalization are functional, product, customer, and location.
Key Facts
- Functional departmentalization: Departments are segregated based on the functions or tasks they perform. Examples include production, finance, marketing, and human resources departments.
- Process departmentalization: Departments are separated based on their role in a production process. For example, a textile mill may have spinning, weaving, dyeing, and printing departments.
- Product departmentalization: Departments are separated based on the type of product produced by the company. For instance, an automobile manufacturing company may have departments for two-wheelers, three-wheelers, four-wheelers, and heavy motors.
- Geographic departmentalization: Departments are made based on the company’s operations in different geographic areas. This can involve establishing branches or offices in different zones or places. For example, a company may have zonal departments established on a country basis.
- Customer departmentalization: Departments are separated based on the types or groups of customers to be handled. This allows for different tactics and strategies to be used for each customer group. Examples include international customers, domestic customers, wholesale customers, and retail customers.
- Combined departmentalization: Organizations may use a combination of different bases of departmentalization. This involves using a mixture or union of two or more bases. It is often used to address rising market competition and complexity of tasks.
- Time departmentalization: Departments are separated based on the division of working time or job shifts. This is commonly seen in organizations that provide 24-hour emergency or essential public services. Examples include hospitals, hotels, airports, police, and security services.
- Number departmentalization: Departments are made based on the maximum limit of persons that can be managed or supervised. This method is often used in schools and colleges for dividing classes. Military forces also use this method.
Functional Departmentalization
Functional departmentalization involves separating departments based on their job types or activities. Examples of functional departments include front-end, register, human resources, inbound/outbound, and specific product sections. This approach allows for departments to specialize in their respective areas and have department-specific managers.
Product Departmentalization
Product departmentalization separates departments based on the type of output each team creates. For instance, an automobile manufacturer might have separate departments for paint and finish, interior and electronics, and so on. Each manufacturing process has its own department, similar to how functional departmentalization divides departments by function. This allows departments to specialize in key areas without needing to understand the preceding or following production steps.
Customer Departmentalization
Customer departmentalization involves dividing work based on customer groups. This approach helps companies tailor their work and services to specific customer needs. It is particularly important in retail and professional organizations where industrial customers and general consumers may require simultaneous service. Different departments can address each customer group’s needs and tailor the purchasing process accordingly.
Location Departmentalization
Location departmentalization is the simplest and most straightforward method of department segregation. Departments are created based on geographic locations. Instead of having one manager responsible for multiple locations, each location has its own dedicated manager. This allows for greater flexibility and customization of services to specific locations and customer bases.
Conclusion
In summary, departmentalization is a crucial aspect of organizing within an organization. By grouping jobs based on common bases, organizations can enhance specialization, improve coordination, and increase efficiency. The four primary bases of departmentalization—functional, product, customer, and location—provide a framework for structuring departments effectively. The choice of departmentalization approach depends on the organization’s specific needs, objectives, and industry context.
References:
- Bases Methods Types of Departmentalization
- Common Organizational Structures
- Organizing: Departmentalization
FAQs
What is departmentalization?
- Departmentalization is the process of grouping jobs within an organization based on common factors or criteria.
What are the four primary bases of departmentalization?
- The four primary bases of departmentalization are functional, product, customer, and location.
What is functional departmentalization?
- Functional departmentalization involves dividing departments based on their job types or activities.
What is product departmentalization?
- Product departmentalization involves separating departments based on the type of product or service they produce or offer.
What is customer departmentalization?
- Customer departmentalization involves dividing departments based on specific customer groups or segments.
What is location departmentalization?
- Location departmentalization involves creating departments based on geographic locations or regions.
What are the benefits of departmentalization?
- Departmentalization can improve specialization, enhance coordination, increase efficiency, and clarify lines of authority and responsibility.
How do I choose the right departmentalization method for my organization?
- The choice of departmentalization method depends on the organization’s specific needs, objectives, industry context, and size.