Advantages And Disadvantages Of Departmentalization _ Business Basics 1a21l
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Advantages and Disadvantages of Departmentalization Samozain
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Advantages and Disadvantages of Departmentalization
Departmentalization - 32,333 views Centralization versus Decentralization of Authority - 12,366 views
Departmentalization is the dividing of organizational functions (design, marketing, etc.) into separate units. The traditional way to departmentalize organizations is by function. Functional structure is the
Laws to Promote Fair and Competitive
grouping of workers into departments based on similar skills, expertise, or resource use. A company
Practices - 6,308 views
might have, for example, a production department, a transportation department, and a finance department. Departmentalization by function enables employees to specialize and work together
Legal and Regulatory Forces | Forces
efficiently. It may also save costs. Other advantages include the following:
Affecting Trading in Global Markets 5,621 views
1. Employees can develop skills in depth and can progress within a department as they master those skills. 2. The company can achieve economies of scale in that it can centralize all the resources it needs and locate various experts in that area.
Going International: Small-business Prospects - 4,539 views
3. There’s good coordination within the function, and top management can easily direct and control various departments’ activities.
As for disadvantages of departmentalization by function, 1. There may be a lack of communication among the different departments. For example, production may be so isolated from marketing that the people making the product do not get the proper from customers.
Management Organizing: Creating a Unified System - 4,405 views Sales Law: The Uniform Commercial Code - 4,251 views
2. Individual employees may begin to identify with their department and its goals rather than with the goals of the organization as a whole. For example, the purchasing department may find a good value somewhere and buy a huge volume of goods that have to be stored at a high cost to the firm. Such a deal may make the purchasing
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department look good, but it hurts the overall profitability of the firm. 3. The company’s response to external changes may be slow. 4. People may not be trained to take different managerial responsibilities; rather, they tend to become narrow specialists. 5. People in the same department tend to think alike (engage in groupthink) and may need input from outside the department to become more creative.
Alternative Ways to Departmentalize Functional separation isn’t always the most responsive form of organization. So what are the alternatives? Figure 8.5 shows five ways a firm can departmentalize. One form of departmentalization is by product. A book publisher might have a trade book department (books sold to the general public), a textbook department, and a technical book department. Customers for each type of book are different, so separate development and marketing processes must be created for each product. Such product-focused departmentalization usually results in good customer relations. It makes more sense in some organizations to departmentalize by customer group. A pharmaceutical company, for example, might have one department that focuses on the consumer market, another that calls on hospitals (the institutional market), and another that targets doctors. You can see how the customer groups might benefit from having specialists satisfying their needs.
Subscribe to Blog via Email Enter your email address to subscribe to this blog and receive notifications of new posts by email. Email Address Subscribe
Some firms group their units by geographic location because customers vary so greatly by region. Japan, Europe, and Korea may involve separate departments. Again, the benefits are rather obvious. The decision about which way to departmentalize depends greatly on the nature of the product and the customers served. A few firms find that it’s most efficient to separate activities by process. For example, a firm that makes leather coats may have one department cut the leather, another dye it, and a third sew the coat together. Such specialization enables employees to do a better job because they can focus on a few, critical skills. Some firms use a combination of departmentalization techniques; they would be called hybrid forms. For example, a company could departmentalize simultaneously among the different layers by function,
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12/2/2014
Advantages and Disadvantages of Departmentalization | Business Basics
by geography, and by customers. The development of the Internet has created whole new opportunities for reaching customers. Not only can you sell to customers directly over the Internet, but you can also interact with them, ask them questions, and provide them with any information they may want. Companies must now learn to coordinate the efforts made by their traditional departments and their Internet people to create a friendly, easy-to-use process for accessing information and buying goods and services.7 The firms that have implemented such coordinated systems for meeting customer needs are winning market share. Progress Assessment Why are organizations becoming flatter? What are some reasons for having a narrow span of control in an organization? What are the advantages and disadvantages of departmentalization? What are the various ways a firm can departmentalize? Critical Thinking Given the limitations of departmentalization, businesses are now trying to redesign their structures to optimize skill development while increasing communication among employees in different departments. The goal, , is to better serve customers and to win their loyalty. What kind of skills and attributes might you need to prepare yourself to work in such an organization?
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Advantages and Disadvantages of Departmentalization | Business Basics
Business Basics High Quality Articles about Business just for You
Home
Search…
ing
Business
Capitalism
Career
Economics
Entrepreneurialism
Entrepreneurship
Franchising
Marketing
Small Business
Home
Marketing
Advantages and Disadvantages of Departmentalization
Most Popular Posts Advantages and Disadvantages of
Advantages and Disadvantages of Departmentalization Samozain
Feb 21st, 2013
0 Comment
Advantages and Disadvantages of Departmentalization
Departmentalization - 32,333 views Centralization versus Decentralization of Authority - 12,366 views
Departmentalization is the dividing of organizational functions (design, marketing, etc.) into separate units. The traditional way to departmentalize organizations is by function. Functional structure is the
Laws to Promote Fair and Competitive
grouping of workers into departments based on similar skills, expertise, or resource use. A company
Practices - 6,308 views
might have, for example, a production department, a transportation department, and a finance department. Departmentalization by function enables employees to specialize and work together
Legal and Regulatory Forces | Forces
efficiently. It may also save costs. Other advantages include the following:
Affecting Trading in Global Markets 5,621 views
1. Employees can develop skills in depth and can progress within a department as they master those skills. 2. The company can achieve economies of scale in that it can centralize all the resources it needs and locate various experts in that area.
Going International: Small-business Prospects - 4,539 views
3. There’s good coordination within the function, and top management can easily direct and control various departments’ activities.
As for disadvantages of departmentalization by function, 1. There may be a lack of communication among the different departments. For example, production may be so isolated from marketing that the people making the product do not get the proper from customers.
Management Organizing: Creating a Unified System - 4,405 views Sales Law: The Uniform Commercial Code - 4,251 views
2. Individual employees may begin to identify with their department and its goals rather than with the goals of the organization as a whole. For example, the purchasing department may find a good value somewhere and buy a huge volume of goods that have to be stored at a high cost to the firm. Such a deal may make the purchasing
Meta Tags
department look good, but it hurts the overall profitability of the firm. 3. The company’s response to external changes may be slow. 4. People may not be trained to take different managerial responsibilities; rather, they tend to become narrow specialists. 5. People in the same department tend to think alike (engage in groupthink) and may need input from outside the department to become more creative.
Alternative Ways to Departmentalize Functional separation isn’t always the most responsive form of organization. So what are the alternatives? Figure 8.5 shows five ways a firm can departmentalize. One form of departmentalization is by product. A book publisher might have a trade book department (books sold to the general public), a textbook department, and a technical book department. Customers for each type of book are different, so separate development and marketing processes must be created for each product. Such product-focused departmentalization usually results in good customer relations. It makes more sense in some organizations to departmentalize by customer group. A pharmaceutical company, for example, might have one department that focuses on the consumer market, another that calls on hospitals (the institutional market), and another that targets doctors. You can see how the customer groups might benefit from having specialists satisfying their needs.
Subscribe to Blog via Email Enter your email address to subscribe to this blog and receive notifications of new posts by email. Email Address Subscribe
Some firms group their units by geographic location because customers vary so greatly by region. Japan, Europe, and Korea may involve separate departments. Again, the benefits are rather obvious. The decision about which way to departmentalize depends greatly on the nature of the product and the customers served. A few firms find that it’s most efficient to separate activities by process. For example, a firm that makes leather coats may have one department cut the leather, another dye it, and a third sew the coat together. Such specialization enables employees to do a better job because they can focus on a few, critical skills. Some firms use a combination of departmentalization techniques; they would be called hybrid forms. For example, a company could departmentalize simultaneously among the different layers by function,
http://business-basics.org/advantages-and-disadvantages-of-departmentalization/
1/2
12/2/2014
Advantages and Disadvantages of Departmentalization | Business Basics
by geography, and by customers. The development of the Internet has created whole new opportunities for reaching customers. Not only can you sell to customers directly over the Internet, but you can also interact with them, ask them questions, and provide them with any information they may want. Companies must now learn to coordinate the efforts made by their traditional departments and their Internet people to create a friendly, easy-to-use process for accessing information and buying goods and services.7 The firms that have implemented such coordinated systems for meeting customer needs are winning market share. Progress Assessment Why are organizations becoming flatter? What are some reasons for having a narrow span of control in an organization? What are the advantages and disadvantages of departmentalization? What are the various ways a firm can departmentalize? Critical Thinking Given the limitations of departmentalization, businesses are now trying to redesign their structures to optimize skill development while increasing communication among employees in different departments. The goal, , is to better serve customers and to win their loyalty. What kind of skills and attributes might you need to prepare yourself to work in such an organization?
Share this:
Digg Print
LinkedIn StumbleUpon
Tumblr
Google +1
Samozain
You might also like:
From Production to Operations Management | America’s Evolving Manufacturing Sat. Aug 10th, 2013
America’s Evolving Manufacturing and Services Base Sat. Aug 10th, 2013
Planning Your Retirement: Social Security Sat. Aug 10th, 2013
No comments.
Leave a Reply You must be logged in to post a comment.
© 2014 Business Basics. All rights reserved.
http://business-basics.org/advantages-and-disadvantages-of-departmentalization/
Business Basics
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