Advantages and Disadvantages Functional departmentation has the advantage of efficiency, because all of the employees in each department are specialists in the same or closely related skills. One of the main advantages of departmentalizing by function is the development of localized expertise, or unit specialization. For example, in practice, owing to rising market competition and emerging complexity of tasks most organizations often uses a combination of above-discussed see point no. Product decision normally base on brand name, functionality, styling, quality, safety, packaging, repairs and support, warranty, accessories and services. Also, the high level of specialization is a barrier for the flexible reallocation of resources within the organization, i. The disadvantage is the challenge of coordinating across different product departments.
Equally important, employee development may be limited to the work of one functional department, resulting in managers with limited experience and expertise, which can negatively affect customer satisfaction. This makes each department of the organization efficient. Departmentalization by numbers is depicted in the image given below. With lots of showy prizes for the best performing regions, employees from top to bottom of their departments strove to bring in the best numbers possible. So the subordinates do not have any freedom. Objectives will sometimes be presented to departmental heads rather than agreed with them. I find it interesting how credit card companies use departmentalization to categorize their customers.
Through a different perspective on the issue can be seen by comparing between traditional model and modern model of the organizational structures, the traditional of organizational structures is illustrated as have effectiveness and efficiency of products or services more than modern organizational structures. Number departmentalization In number departmentalization, separate departments are made after analysing and judging the maximum limit up to which number of persons can be managed or educated or supervised or taken care of. As long as an enterprise belonged in an industry whose market, sources of raw materials, and production processes remained relatively unchanged, few entrepreneurial decisions have to be reached. Given the nature of these choices and decisions, departmentation and the criteria or bases used for creating departments can have serious impact on the organization's effectiveness. This approach allows the credit card company to create products and services based on a specific customer type, with experts in that field. Activities are grouped into regions, zones, district, branches etc.
Departmentalization is an aspect of organizational design where a business divides its staff into smaller units based on tasks within the company. The activities of each process are assigned to a departmental head who is responsible for all the functions of concerned department. Product departmentalization is when a company is organized by specific products. Disadvantages of Tall Organisation 1. This often creates less flexibility, adaptability, and units of action within the firm. Departmentalization is the process of grouping activities, customers, or job functions into specialized groups of an organization to create better coordination. Diagram of Tall Organisation Following diagram gives a sample visual preview of how a Tall Organisation Structure looks like.
Given this nature, we might guess that this method is more useful where the task requires more of a muscle force for example, an army battalion, or the building contractors' work-force rather than use of specialized skill. The advantage of the product departmentalization is that increases accountability for product performance and allow manager and employee work in one area of expertise. It brings about specialization in a product or service which makes optimum utilization of human resources. This fee could be a yearly, quarterly or monthly allocation depending on how the customer would like to be charged. Any software whether it is out of the box or custom produced, there is an implementation process that would need to be done in order to ensure that the software is working properly. The quality of performance will improve due to close supervision.
Each type of customer usually has different needs and organizations often departmentalize along differing customer types such as consumers, businesses, and governments. Functional Departmentalization- Putting jobs that do similar activities together into a single department. So, in this way, the entire organization is divided into parts, i. The staff which is divided as per the time or shift basis might possess a set of different skills and abilities. Usually complex products are produced in lower volume than simple products. The degree of decision-making authority is centralization and usually were made by the top management of the highest vertically structures hierarchy. Mass production requires many workers to maintain, working in such dangerous facilities requires you to pay them higher than average wages, including insurance.
They take full advantage of the image of a company from a country in which agriculture industry accounts for more than 70% - Vietnam. While I was working in retail, we were departmentalized by region and had huge selling competitions that pegged all the different areas against one another. Departmentalization by function is a method of organizing work by grouping together people who perform similar or closely related tasks. Functional departmentalization In functional departmentalization, departments are segregated i. The disadvantage customer departmentalization is the satisfaction or feedback from customer is challenging of coordinating across different customer departments.
Responsibility for profits is at the top only. All departmental heads are specialists and experts in their own area of business. By breaking a large company into smaller departments, the customer can get the help they need faster and specific departments can work towards fixing common problems. The matrix organization is not without problems. The Indian Railway, for example is divided along territorial lines into central railway, western railway and so on.
Departmentalization of organization by customer group. All activities of specified territory are assigned to a particular department or regional managers. These range from low-end motels to high-end, five-star resorts. For example, students having numbers from 1 to 50 are made to sit in A division of their class and so on. This structure may be advantageous because it allows its personnel to specialize in developing products and serving the needs of particular markets and classes of customers.
In this method, all the activities related to a function or which are of similar nature are combined in a single unit, to give proper directions to the entire group in one go. In order to receive upgrades and enable the customer to use our support desk when there is an issue, we charge a support fee. In a restaurant environment, this could take the form of individual customers versus catering for corporate clients and hosting group events. I wonder if this kind of organization is based solely on credit score results and user provided data, or if there is some room for service people to shuffle you in the order of things. Hence, the plant-wide rate and departmental rates are no longer adequate to use for costing products.