Chapter 7 - Organising Flashcards
Define Departmentalisation
Method of subdividing work and workers into separate organisational untits tthat take responsibility for completing particular tasks
What are the 4 Types of Departmentalisation?
- Functional Departmentalisation
- Product Departmentalisation
- Geographic Regions Departmentalisation
- Customer Departmentalisation
What is Functional Departmentalisation?
- People with similar occupational specialities are put together in formal groups
- Examples being the Accounting Department, Sales Department etc.
Discuss the Advantages and Disadvantages of Functional Departmentalisation
Advantages
- Work done by highly qualified specialists
- Lowers costs by avoiding duplication
- Less communication and coordination problems due to the similar working experience
Disadvantages
- Cross-departmental coordination can be difficult
- Can lead to slower decision making
- Can lead to managers with narrowed experience
What is Geographic Regions Departmentalisation?
- Organises work and workers into separate unit responsible for doing business in particular geographic areas
- Examples include companies with different outlets operating in a country
Discuss the Advantages and Disadvantages of Geographic Regions Departmentalisation
Advantages
- Help companies respond to demands of different markets with varying values and cultures
- Reduces costs by location unique organisational resources closer to customers
Disadvantages
- Duplication of resources
- Cross-departmental coordination can be difficult as they are physically far apart from one another and managers have limited contact with one another
What is Product Departmentalisation?
- Organises work and workers into separate units responsible for producing particular products or services
- Examples include brands like Samsung which produces home appliances, computers and other related products
Discuss the Advantages and Disadvantages of Product Departmentalisation
Advantages
- Allows managers and workers to specialise and become experts in a product line
- Can develop a broad set of experiences and expertise related to the product line
- Faster decision making
- Fewer conflicts
Disadvantages
- Duplication of resources
- Higher costs related to duplication; each department must have their own sections for customer service, human resource, manufacturing etc.
- Cross-department coordination can be difficult
What is Customer Departmentalisation?
- Organises work and workers into separate units responsible for particular kinds of customers
Discuss the Advantages and Disadvantages of Customer Departmentalisation
Advantages
- Focuses organisation on customer needs
- Allows companies to specialise and adapt their products to suit target groups
Disadvantages
- Duplication of resources
- Cross-department coordination can be difficult
- May lead to decisions that please customers but hurt the organisation
What are Organisational Charts?
- Box-and-lines illustration showing the formal lines of authority and the organisation’s official positions or work specifications
- Important to show employees to inform them of their areas of responsibility
- Facilitates more effective communication and coordination
- Important to show outsiders to inform them of the organisation’s structure
- Helps them to contact the right staff for queries
What is the difference between Geographic Regions Departmentalisation and Customer Departmentalisation?
Geographic Regions Departmentalisation focus on convenience while Customer Departmentalisation focus on the different needs for individual types of customers
