Introduction to the types of departmentalization in a company
There are basically five types of departmentalization in organizations. The five types of departmentalization are: functional, product, customer, geographical and process.
Functional departmentalization
Most companies practice functional departmentalization. An example is the Production department, HR department, Accounts department, Marketing department and IT department.
Product departmentalization
When a company has a wide range of products, product departmentalization is a logical choice. For example, Kimberly Clark manufactures children’s products, toiletry and industrial hygiene products.
Each product cluster has its own manufacturing plant, research and development, and marketing team.
Customer departmentalization
When a company has different customer bases, customer departmentalization allows better
customer servicing. A travel agency can have one team taking care of corporate customers, and the other team taking care of walk-in retail customers.Geographical departmentalization
Geographical departmentalization is good for a multi-national company. The company can hire local employees to serve different customers from different geographical locations.
The different offices in different countries usually report to a regional headquarter. For example, the regional headquarter for Asia is in Singapore, and the
regional headquarter for Europe is in London.Process departmentalization
Process departmentalization is practiced in many factories with assembly line. The employees are grouped into a team to take care of a specific process.
Conclusion to the five types of departmentalization
Most companies employ a mixture of different departmentalization types. It can be functional departmentalization with process departmentalization. The important thing is that each employee knows exactly where he or she fits in.
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