Departmentalization

Question

  1. What is departmentalization? Explain departmentalization based on work, products, geography, and customers. Provide an example of each.

Sample Answer

According to (Montana & Charnov, 1993) departmentalization is defined as the process of grouping of related organizational functions into manageable units for effective and efficient achievement of organizational objectives. The major forms of departmentalization include functions, products, process, customer, market and geographic area. Departmentalization based on work involves the grouping of related functions such as finance, marketing and operations. The departmentalization based on products involves the grouping of services where there is need for specialized knowledge for products. The need to provide better products to specific geographical markets necessitates market departmentalization, while departmentalization based on customers involves the division of organization around the different customers it serves.

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