Grouping Flashcards
activities can be organised in what 5 ways?
- functional grouping
- product/service grouping
- place/territory grouping
- customer grouping
- technology grouping
what problems to grouping activities prevent?
- a disorganised workforce
- poor productivity
- duplication of resources
what is functional grouping?
this is when an organisation is split into departments which represents the main functional areas which are all essential to the running of an organisation.
what are the main functional areas which are essential to the running of an organisation?
- HR (staff)
- marketing
- finance
- operations
- administration
what are the advantages to functional grouping?
- resources are better used
- allows for specialisation in each field
- communication and cooperation are done well
- clear structure
- clear lines of authority
what are the disadvantages to functional grouping?
- satff loyalty is to the department rather than the organisation
- communication barriers and rivalries can exists between departments
- some problems cannot be solved by a single department.
- decision making can be slow as all departments must be consulted
what is product grouping?
the organisations activities are grouped around the different products or services that provides. usually known as a ‘division’.
each product/service requires specialist knowledge and expertise so all staff this knowledge are grouped together in a division.
They will have their own functional staff.
what are the advantages of product grouping?
- Expertise is available.
- Easier to spot under performing products.
- Allows for quicker response to customer demand.
what are the disadvantages of product grouping?
- As each division has its own functional areas – duplication of task, resources and staff.
- Divisions may find themselves competing against one another.
- Difficult to share research and developing across divisions.
what is customer grouping?
Where the individual needs of different customers are important the business will organise a way that they have close contact with their customers.
Most likely to exist in the service sector.
what are the advantages of product grouping?
- Highly responsive to customer needs this generate customer loyalty.
- Allows personal service.
- Customer gets the feeling of receiving a personal service.
- Business can respond much faster to individual needs.
what are the disadvantages of product grouping?
- Record keeping and administration of this type of group can be time-consuming.
- Large staffing costs.
- Competition between groups can arise.
what is geographical/place grouping?
Businesses who customers are located over multiple countries often organise themselves in multiple locations close to where their products are delivered e.g. multinational companies.
Allows regional managers to be appointed who can take control of the activities in their area and different market conditions.
what are the advantages of geographical grouping?
- Local offices can cater for local customer’s needs.
- Local offices can overcome language barriers and cultural differences.
- Specialist knowledge and marketing techniques can be used.
- Customer loyalty can be built up through personalised service.
- Local labour can be cheaper.
what are the disadvantages of geographical grouping?
- Administration can be time consuming.
2. Duplication of personnel and resources.
