Departmentalization

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What is departmentalization?

Departmentalization refers to the process of grouping activities into departments and it is


the basis for grouping position into departments and departments into the total organization.
Why is it required?
Division of labor creates specialists who need coordination. This coordination is facilitated by
grouping specialists together in departments.

Popular Types of Departmentalization
Functional departmentalization
Product departmentalization
Customer departmentalization
Geographic departmentalization
Process departmentalization
Divisional departmentalization

Discuss any one form of departmentalization.

Functional departmentalization:

Grouping activities by functions performed. Activities can be grouped according to function
(work being done) to pursue economies of scale by placing employees with shared skills and
knowledge into departments for example human resources, IT, accounting, manufacturing,
logistics, and engineering. Functional departmentalization can be used in all types of
organizations.

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