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.
Most companies practice functional departmentalization. An example is the Production department, HR department, Accounts department, Marketing department and IT department.
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.
When a company has different customer bases, customer departmentalization allows bettercustomer 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 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
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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