Product and Geographic Departmentalization
Departmentalization is the process of grouping specialized jobs into logical units (Griffin, 2013). When deciding what departmentalization type is best for a company managers are faced with several decisions/dilemmas. The following should be considered:
• The products they produce
• Who their customers are
• Where their customers are located
Once the above considerations has been taken, a manager can then look at the advantages and disadvantages to the different types of departmentalization.
Two types of departmentalization are product and geography.
Product departmentalization is when a company is organized by specific products. Take a look at 3M Corp; they make both consumer and industrial products. All of 3M Crops products operate under different divisions (Griffin, 2013). For example their Post-it and Scotch Brite brands could be located in the same building, but do not have the same managers or staffing resources. Basically the mangers and staff for both brands are coexisting with no business interaction. This type of departmentalization can also apply to retail stores. Most retail stores are broken into different departments.
The advantages of product departmentalization are:
• Allows people to specialize in one area of expertise
• Makes it easier to assess performance
• Makes decision making faster
The disadvantages of product departmentalization are:
• Duplication of functions
• Coordination across different product departments
• Limited view of organizational goals
The above advantages and disadvantages taken from (Zararain, 2012)
Geographic departmentalization is creating departments in the geographic areas they service. Coca-Cola is a company that operates using geographic departmentalization. They have 6 operating regions: Eurasia & Africa, Europe, Latin America, North America, Pacific and Bottling Investments – in addition to Corporate (Unknown, 2011).
The advantages of product departmentalization are:
•
• The products they produce
• Who their customers are
• Where their customers are located
Once the above considerations has been taken, a manager can then look at the advantages and disadvantages to the different types of departmentalization.
Two types of departmentalization are product and geography.
Product departmentalization is when a company is organized by specific products. Take a look at 3M Corp; they make both consumer and industrial products. All of 3M Crops products operate under different divisions (Griffin, 2013). For example their Post-it and Scotch Brite brands could be located in the same building, but do not have the same managers or staffing resources. Basically the mangers and staff for both brands are coexisting with no business interaction. This type of departmentalization can also apply to retail stores. Most retail stores are broken into different departments.
The advantages of product departmentalization are:
• Allows people to specialize in one area of expertise
• Makes it easier to assess performance
• Makes decision making faster
The disadvantages of product departmentalization are:
• Duplication of functions
• Coordination across different product departments
• Limited view of organizational goals
The above advantages and disadvantages taken from (Zararain, 2012)
Geographic departmentalization is creating departments in the geographic areas they service. Coca-Cola is a company that operates using geographic departmentalization. They have 6 operating regions: Eurasia & Africa, Europe, Latin America, North America, Pacific and Bottling Investments – in addition to Corporate (Unknown, 2011).
The advantages of product departmentalization are:
•