Geographic departmentalization is a type of organizational structure in which a company is divided into departments based on geographical location. This structure is often used by companies with a global presence, as it allows them to better manage operations in different regions of the world.
There are several advantages to using a geographic departmentalization structure. First, it allows a company to tailor its operations to the specific needs and characteristics of each region. For example, a company may have different marketing strategies for different regions, or may need to adapt its products or services to meet the needs of local customers. Additionally, a geographic departmentalization structure can help a company better respond to local regulations and cultural differences.
Another advantage of geographic departmentalization is that it allows for better communication and coordination between different regions. With this structure, each department is responsible for its own operations, but there is also a centralized management team that oversees the overall direction of the company. This can help ensure that all regions are working towards common goals and that there is a consistent level of quality across the company.
However, there are also some challenges to using a geographic departmentalization structure. One potential issue is that it can create silos between different regions, which can lead to misunderstandings and conflicts. Additionally, managing operations in different regions can be complex, as there may be significant differences in local laws, customs, and business practices.
Despite these challenges, many companies find that the benefits of geographic departmentalization outweigh the drawbacks. By organizing their operations around geographical location, they are able to better tailor their products and services to local markets and better respond to the needs of their customers. This can help them remain competitive in a global marketplace and achieve long-term success.
Product and Geographic Departmentalization, Sample of Essays
There are different types of organizational structures that companies follow, depending on a variety of factors like leadership style, type of organization, geographical regions, work flow and hierarchy. Every employee in a department either performs similar tasks and shares a common goal or works within a multidisciplinary department with varied skills. Net The business becomes a small central office electronically connected to other businesses that perform vital functions. This makes it easier for managers to reward and recognize employee efforts and outcomes. Improving efficiency and productivity Placing employees with similar skills, tasks, and knowledge in the same department can improve efficiency and productivity. M5 Importance of effective communication.
What is Departmentalization? Types, Examples, Objectives
This type of system works well for businesses that have a wide range of clients, such as the average consumer or a government organization. Related: Customer departmentalization Customer departmentalization divides the company by customer groups or segments. Sometimes, the customer base of a company can belong to multiple areas. On the other hand, KFC has a quality control department, which maintains the color, taste and reliability in the quality of its products. What are the advantages of departmentalization by territory? These bases can be types of tasks, capacities, functionality or other stipulated guidelines according to what the organization wants.
Departmentation takes place in various patterns like departmentation by functions, products, customers, geographic location, process, and its combinations. Logistical efficiencies The geographic divisional structure allows companies to organize geographically instead of centralizing. Popular types of Departmentalization 1. While departmentalization is used in many business applications, the most effective type of departmentalization varies between companies. In addition, there are product departments for multiple product lines or independent lines. Easier to coordinate With geographical organization structures, each local division acts as its own business. Geographic departmentalization plays a vital role in reaching out targeted audiences residing in different areas.
Departmentalization by Territory: Meaning, Advantages and Disadvantages
It helps to meet local demands more effectively. Territory is also important because in International law, jurisdiction which is an attribute of state sovereignty is exercised primarily on a territorial basis. Divisional departmentalization There are companies that take separate business ventures and assign separate departments to them. Advantages of customer departmentalization Encourages concentration on customer needs. The most common functional departments are finance, marketing, logistics, human resources, and operations.
Both companies have a marketing department, which generates the sale of their products and services. The IS in such a structure is merely used for store or communicate information among the different levels. Customer departmentalization This involves creating several departments for catering to some customers or a set of customers. They have to be brought under one department. Thus, a highly qualified mid-level manager may have the opportunity to move up to the top level. Geographic Instead of having a manager split across multiple geographic locations, there are specific managers for each location. Departmentalization as a method of organizational structuring can be found in both private and public organizations.
It is based on diversity of skills, rather than similar skills. In order to implement an organizations commitment to social responsibility it is necessary to identify what social problem the organization intends to address, develop policies on what the organization plans to do to successfully fulfill its obligation and ensure stakeholder buy-in. Chapter 11: ORGANIZATIONAL STRUCTURES: CONCEPTS AND F0RMATS KEY TERMS departmentalization the grouping of related functions into manageable units to achieve the objectives of the enterprise in the most efficient and effective manner. The main disadvantage of departmentalization is the potential for inefficiencies. Wrapping Up — Different businesses adopt different types of departmentalization techniques to expand their business and penetrate remote areas.
In a scenario like this, the departmentalization can be carried out according to the basis of the location of the entire group of customers. What is Departmentalization by location? Departmentalization is a highly structured format of management, meaning that it is not the most effective in all situations such as those where change is constant. By customer Organize the work according to the client's needs. Factors in Departmentalization Departmentalization has the effect of making an organization more effective and productive. Increased efficiency and expertise because all related activities are performed by the same group of people in the same location; encourages tight control for upper level management; allows for a logical use of functions; each department can become more highly specialized and experienced over time.
Because each process requires different skills, process departmentalization allows homogenous activities to be categorized. Smaller businesses create departments such as production, marketing, accounting, human resources, and research to simplify operations and increase efficiency. This growth can make it difficult for managers to control all the employees and activities within the organization. Most retail stores are broken into different departments. In this way, the manager is given responsibility for the entire process to complete the activities that improve the efficiency of the product. In addition, departmentalization can help with communication because everyone is on the same page and working toward achieving one goal.
These structures may use more resources, especially with duplicate infrastructures or activities within the organization. As the figure shows, the organization has traditional functional departments columns of the matrix , and each employee belongs to one of those departments. Since departments have a particular role, the staff get training and improve on that area. The concepts are as follows: - M1 Advantages of Departmentalization. Controlling is evaluating and analyzing. Management: A Streamlined Course for Students and Business People. There are thus multiple sections of the company.
Process departmentalization Process departmentalization is when an organization groups its activities by the production process. These responsibilities, processes, etc. Potential conflict The divisions in companies with geographical organizational structures often have autonomy to make their own decisions. Related: Benefits of Competitions in the Workplace Disadvantages of geographical organizational structure Here are some disadvantages of the geographical organizational structure: Duplicate activities Each division within a geographical organizational structure has their own departments. Geographic departmentalization is usually used by multinational corporations.
