Which Form Of Departmentalization Is Best If The Regions In Which The Company Competes Have Unique Environmental Characteristics? (2023)

FAQs

Which type of departmentalization groups activities based on geographic area in which they are performed? ›

(2) GEOGRAPHICAL DEPARTMENTALIZATION : Geographical departmentalization is an arrangement of departments according to geographic area or territory. (3) PRODUCT DEPARTMENTALIZATION : Companies may have multiple products. . All common activities required to produce and market a product are grouped together.

Functional departmentalization: grouped by organizational role, such as accounting, sales, marketing, and production. Product departmentalization: grouped by product line or product type. Geographical departmentalization: grouped by location, often based on cultural, social, and political standards.

In functional departmentalization, an organization is organized into departments based upon the respective functions each performs for the organization. For example, a manufacturing company may create a production department, sales and marketing department, an accounting department, and a human resources department.

The most common way of process departmentalization is the division of the firm into business functions, such as purchasing, manufacturing, sales, accounting, etc.

Examples of departmentalization

ABC Company is a multinational Company with its offices in the United States and India. It has created several departments because of the different geographical locations and because it needs to carry out systematic and specific work functions.

Functional departmentalization is an organizational structure where business leaders divide teams according to the professionals' areas of specialization.

Departmentalization refers to the formal structure of the organization, composed of various departments and managerial positions and their relationships with each other. As an organization grows, its departments grow and more sub-units are created, which in turn add more levels of management.

The four types of organizational structures are functional, multi-divisional, flat, and matrix structures. Others include circular, team-based, and network structures.

The functional, product, geographic, and customer bases are the four that are most often used for the organization of departments.

1. Functional Departmentation: It refers to grouping the activities of an enterprise on the basis of functions such as production, sales, purchase, finance, personnel, etc. The actual number of departments in which an enterprise can be divided depends upon the size of establishment and its nature.

What is an example of functional structural? ›

What is an example of functional structure? A functional structure is headed by managers with technical expertise. An example is Starbucks' structure, which comprises a vice president who heads three divisions. The vice president is supported by departmental managers.

Product Departmentalization

For example, the salespeople can talk to the design and manufacturing specialists in their own department to address customer satisfaction issues rather than having to go outside the department.

Functional structure: This type of business structure organizes a company into different departments based on areas of expertise. For example, lawyers work in the legal department and marketers work in the marketing department.