An organizer is free to use any means of departmentalization in constructing an organization structure. These types result mainly from such things as the nature and amount of the work to be done, the degree of specialization practiced, and the people and the workplaces available for the work. Restaurants are often organized around the types of food served, the tasks handled by the staff and the chain of command in the company. These three additional units appear in the organization structure at the level immediately below that of the fundamental unit of sales. Functional departmentalization may be advantageous because it can increase efficiency and expertise since all related activities are performed in one place by one group of people that specialize in that activity.
Disadvantages: In such departmentation, there may be difficulty in coordinating the different process-departments, because the work of each process depends fully on the preceding process. Products and Services Offered Departmentalization according to product type could work in various way depending on the size of the restaurant. Each area supervisor is responsible for the performance of a group of stores within a specific geographical area. Such division of work, thus, is helpful for expansion of business. When taking a closer look at the three ways of departmentalization by purpose—product, customer, and location—we note that there are some specific advantages related to it. Such managers may not be always available.
For example, roles may be divided into front of house and back of house. In a small organization, where there is not a full-time job on some days for a secretary, it is better to have a central secretarial pool than to have a private secretary for each man. Other departments may be developed if there are a add-on services such as banquet facilities and catering or if there are several stores within a geographic region. In this type of departmentalization, the bar becomes a separate department from the dining area or kitchen, a logical method of categorization in this industry. In modern times, Gulick and Urwick 1937 were the first to introduce a theory of different departmentalization strategies, which were referred to as departmentalization by purpose and departmentalization by process.
Each group of customers needs different tactics and strategies to handle them better. To illustrate, Under the fundamental unit of marketing, the scope of the work may be so broad that it is believed advantageous to divide the work into advertising, sales promoting, and selling. It is generally used when the production line is complex and diverse requiring specialised knowledge and huge capital is required for plant, equipment and other facilities such as in automobile and electronic industries. Owing to the complexity of tasks and the competitive environment in which organisations operate, they often use a combination of the above-mentioned methods in departmentalization. Territorial departmentalization is especially popular for sales where division appears feasible according to some geographic market segregation. A departmental head or manager is appointed to supervise and control the activities of the concerned department.
For example, a employing functional departmentalization would tend to together workers that perform a particular function, such as , that differs substantially from the tasks performed by other members. The departmental managers can delegate tasks and duties to the subordinates, and they are accountable to the chief executive for the performance of the department. Here, inside an automobile company, all activities, which are directly or indirectly related to car manufacturing are grouped together and assigned to four-wheeler or car department. Initially the aerospace industry and later Dow Coming, General Electric, Shell Oil, and other industry giants adopted this concept of a project superimposed on a traditional functional organization. E Departmentation by Process or Equipment: In such type or departmentation the activities are grouped on the basis of production processes involved or equipment used.
So, product departmentation provides an excellent training facility for the top managers. The organization is a system of integrated parts, and to give undue emphasis to any functional part at the expense of the entire organization creates organizational islands, thus resulting in inefficiency and significant behavioral problems. When every department looks after one major function, the enterprise is developed and efficiency of operations is increased. Functional departmentalization can be used in all types of organizations. The processes are set in such a way that a series of operations is feasible making operations economic.
Coordinating structure As was stressed in the discussion of division of labor, an organization must be viewed by all managers at all levels as a cohesive whole, never as separate, independent functional units. Usually, this necessitates an educational effort so that none feel that their decision-making is threatened, and non-management members learn how to function with two managers. Moreover, sending managers to work in each region provides excellent training for upper level management positions where a broad perspective is required for success. Need for and Importance of Departmentation 3. Expansion: One manager can supervise and direct only a few subordinates. Types of customers are the key basis of departmentalization of the enterprise. A separate department is created for a single product or product line and all functions like production, finance, marketing, personnel etc.
In large restaurants, the kitchen may be divided into preparation sections such as salads, grilling station, side dishes and desserts. Sales would fall under the role of a server assisting customers and helping them select an enjoyable meal while operations in a restaurant centers on the preparation of food. When taking a closer look at the three ways of departmentalization by purpose—product, customer, and location—we note that there are some specific advantages related to it. Process departmentalization In process departmentalization, departments are separated based on their role in a production process. For an example, departments can be made based on night shift, morning or regular shift, evening shift, etc.
Hence, the manager in charge of sales splits advertising and sales promoting activities, and for each, places a subordinate in charge. However, care should be exercised in adopting matrix departmentalization. Diagram Credits © Moon Rodriguez. Departmentalization like this would effectively also be functional and possibly chain-of-command departmentalization at the same time. For example, a big company with a diversified product line may have three product divisions, one each for plastics, chemicals, and metals.
Such type of departmentation is useful where the work is repetitive, manpower is an important factor, group efforts are more significant than individual efforts, and group performance can be measured. In fact, many large companies are diversifying in different fields and they prefer product departmentation. Each type of customer usually has different needs, and organizations often departmentalize along different customer types, such as consumers, businesses, and governments. Departmentalization by using a combination of two or more different bases is shown in the following diagram. A very few men were still entrusted with a great number of complex decisions.