This document discusses different types of organizational structures and departmentation. It describes functional departmentation organized by enterprise functions like production, sales, finance. Territorial departmentation is organized by geographic area. Customer-based departmentation is organized by customer groups. Product departmentation is organized by product or product line. The document also discusses matrix organizations that combine functional and project structures, strategic business units that operate like independent businesses, virtual organizations connected through technology, and factors to consider when choosing an organizational structure.
4. TABLE OF CONTENTS DEPARTMENTATION BY ENTERPRISE FUNCTION DEPARTMENTATION BY TERRITORY OR GEOGRAPHY DEPARTMENTATION BY CUSTOMER GROUP DEPARTMENTATION BY PRODUCT MATRIX ORGANIZATION STRATEGIC BUSINESS UNITS xORGANIZATION STRUCTURES FOR THE GLOBAL ENVIRONMENT THE VIRTUAL ORGANIZATION xTHE BOUNDARYLESS ORGANIZATION CHOOSING THE PATTERN OF DEPARTMENTATION
5. QUIZ WHAT DEPARTMENTS WOULD YOU LIKE TO HAVE IN YOUR FUTURE IT ORGANIZATION? NAME ANY
6. DEPARTMENTATION BY ENTERPRISE FUNCTION Departmentation: “Grouping of activities according to the functions of an enterprise, such as production, sales and financing”. Functions may be production, sales, finance, Human Resources, IT, Technology, Marketing, engineering etc
8. DEPARTMENTATION BY TERRITORY OR GEOGRAPHY “Grouping of activities by area or territory is common in enterprises operating over wide geographic areas” for example automobile assembling, chain retailing, wholesaling, oil refining, postal service, courts etc
10. DEPARTMENTATION BY CUSTOMER GROUP “Grouping of activities that reflects a primary interest in customers for example consumer banking, corporate banking, wholesale super stores (macro), Glow, Djuiceetc
11. DEPARTMENTATION BY PRODUCT “Grouping of activities according to products or product lines especially in multiline, large enterprises
13. MATRIX ORGANIZATION “the combining of functional and project or product patterns of departmentation in the same organization” for example installation of a data processing system, construction, engineering etc
14. Matrix organization: in engineering Project A Manager Project B Manager Project C Manager Project D Manager
15. STRATEGIC BUSINESS UNITS Distinct businesses set up as units in a larger company to ensure that certain products or product lines are promoted and handles as through each was an independent business” To be an SBU, the unit must: have its own mission, distinct from others Have definable group of competitors be able to prepare its own integrative parts manage its own resources in key areas be of appropriate size Potential problems The allocation of resources to individual SBUs can result in underinvestment in core competencies (such as in engines in automobiles) that benefit the total organization The SBU managers may tend to hide talented people rather than lend them to another SBU
16. THE VIRTUAL ORGANIZATION A rather loose concept of a group of independent firms or people that are connected through, usually information technology Benefits: These operate with minimal HR expense the competencies of remotely operating parts or people or other organizations are accessible Organizations are flexible Reduced risks involved These can respond rapidly to market needs Disadvantage: The other competitors have the room to take advantage of the same competencies as well The virtual library, or virtual university or people working from home for organizations are few examples
17. CHOOSING THE PATTERN OF DEPARTMENTATION Keeping in mind the following helps the managers to decide on the type of department they choose The situation the organization is facing What kind of jobs are to be done Who are people and what are their personalities What is the technology employed in the department What kind of customers they have What are the internal and external factors of the organization What are the goals and objectives of the organization What are the advantages and disadvantages of each type of departmentation The types may be modified depending upon the situation A mixed type of departmentation may also be adopted
