Grouping Flashcards
Functional grouping
Board of Director–> chief executive–> production, marketing, accounts, human resources, IT
Define functional grouping
Splitting up the organisation into seperate departments e.g. Finance, marketing
Discuss functional grouping
Advantages:
- specialised staff are grouped together so can share expertise
- easy to know which departments to contact
- mangers have same skills as their subordinates so can evaluate their work better
Disadvantage
- difficult to monitor a whole project as different parts done by different teams
- risk of conflicts between factions
Geographical grouping
Managing directors–> UK, North America, South America, Asia
Define geographical grouping
Splitting the organisation according to the different geographical areas it operates in eg. US, Europe.
This is common in businesses where local ,markets differ greatly eg car or clothing companies,
Discuss geographical grouping
Advantages
- each location can focus on the needs of its local market- know the market well you can meet the needs of the market.
- locations can respond to changes in the local market eg PESTEC Factors- gives the business flexibility to respond to changes in their country.
- allows for close relationships with local suppliers
Disadvantages
- duplication of business resources e.g. Marketing depts (high staffing costs)
Product grouping
Managing Directors–> product A, Product B, product C, products D,
Define product grouping
Splitting the organisation according to the different products it sells eg homeward, electronics
Discuss product grouping
Advantages
- staff in each group have expert knowledge of their product therefor create products to a high standard resulting in customer satisfaction.
- groups can respond quickly to changes eg PESTEC factors
- business can easily identify under-performing products and take action
Disadvantage
- whole new group required if the business decides to introduce new product lines (costly)
- duplication of resources (high staffing costs) -costly
Customer grouping
Managing directors–> customer type A, customer type B, customer type C, customer type D
Define customer grouping
Splitting the organisation into the different target markets it sells to eg consumer, B2B
Discuss customer grouping
Advantage
- marketing can be done differently to appeal to different markets
- each group focuses on the needs of one customer type so loyalty can be achieved
- groups can make changes quickly when customer needs change
Disadvantage
- staff-customer relationships are lost when staff move department
- duplication of resources ( high staffing costs)
