Departmentalizing

The process of establishing departments within the management system.

Types / Advantages / Disadvantages

1. Functional

• Power of functional heads promotes consistency.
• Relatively easy to assign blame.
• May prove difficult to coordinate between various functions.
• Difficult to assign credit or blame.
  

2. Product

• Allows managers to focus on products sold.
• Easy to assign blame / credit.
• Focus may force managers to miss differences in customers
• Difficult to coordinate across the products.
  

3. Geographic

• Managers can focus on regions.
• Allow firms to develop human resources.
• Difficult to coordinate between various regions.
• Difficult to assign blame / credit.
  

4. Customer

• Allows managers to focus and cater the most important customers.
• Easy to assign blame.
• Difficult to coordinate across various customer.
• May introduces complexities.
  

5. Matrix

• Allow firms to pool human resources for both short term and long terms.
• Maintain flexibility.
• Difficult for employees to understand power structure within the firm.
• Difficult for employees to prioritize responsibilities based on multiple authority figures.