Discuss two (2) ways in which an organization can be departmentalized. Illustrate your answer with appropriate diagrams.
Departmentalization refers to the basis on which individuals are grouped into departments and departments into total organization.
The two ways of departmentalization are as follow:
Departmentalization by function
Grouping of groups of individuals based on the functions performed. The positions are grouped into departments based on similar skills, expertise, and resource use. For example, finance department is founded upon a group of financial experts who help to draw the financial plan of an organization. Logical reflection of functions, means of tight control, follows principle of occupational specialization and maintains of the power and prestige of major functions are among the advantages of functional departmentalization. Functional departmentalization can be used at all types of organizations.
Departmentalization by geographical regions
All activities in a given area or territory should be grouped and assigned to a manager. If an organization’s customers are geographically isolated, it can group jobs based on geography. The advantages of regional departmentalization are responsibilities are places at all level, places emphasis on local markets and problems, better face-to-face communication with local interests and improve coordination in a region. Most franchiser applies this approach in their organizations. Secret Recipe restaurant for example, has expanded the business to the international market; the organization would need a regional departmentalization method in order to take advantages of economies of local operations in each country.