Basic Departmentalization Formats

Departmentalization: Grouping of related jobs or processes into major organizational units. Overcomes some of the effect of fragmentation caused by differentiation (job specialization). Permits coordination (integration) to be handled in the least costly manner. Sometimes refers to divisions, groups, or units in large organizations.

Functional Departments: Categorize jobs according to the activity performed

Product-Service Departments: Group jobs around a specific product or service

Geographic Location Departments: Based on the physical dispersion of assets, resources, and customers

Customer Classification Departments: Centered on various customer categories. Work Flow Process Departments in Reengineered Organizations.

Emphasis on smooth and  speedy work flow between two points:

—  Identifying customer needs

—  Satisfying the customer

Alternative Departmentalization Formats