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Organization Structure:Departmentation
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Departmentation byEnterprise Function
Most widely employed basis for organizingactivities and is
present in almost everyenterprise at some level in the
organization
structure.No generally accepted terminology for
functional departments: A manufacturingenterprise employs the
terms production,
sales, and finance; a wholesaler isconcerned with such
activities as buying,selling, and finance; and a railroad
isinvolved with operations, traffic, and
finance.
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Departmentation by EnterpriseFunction
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Departmentation by Territoryor Geography
Rather common in enterprises that operateover wide geographic
areas.
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Departmentation by Territoryor Geography
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Departmentation byCustomers
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Departmentation by Product
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Matrix Organization
The combining of functional and project orproduct patterns of
departmentation in thesame organization structure.
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Matrix Organization (inengineering)
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Guidelines for Making MatrixManagement Effective
1. Define the objectives of the project or task.2. Clarify the
roles, authority, and
responsibilities of managers and teammembers.
3. Ensure that influence is based onknowledge and information,
rather than onrank.
4. Balance the power of functional and projectmanagers.
5. Select an experienced manager for theproject who can provide
leadership.6. Undertake organization and team
development.7. Install appropriate cost, time, and quality
controls that report deviations from standards ina timely
manner.
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Strategic Business Units(SBUs)
Distinct little businesses set up as units in alarger company to
ensure that a certainproduct or product line is promoted and
handled as though it were an independentbusiness.
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Strategic Business Units
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Organization Structures forthe Global Environment
Organization structures differ greatly forenterprises operating
in the globalenvironment.
The kind of structure depends on a varietyof factors, such as
the degree ofinternational orientation and commitment.
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The Virtual Organization
A rather loose concept of a group ofindependent firms or people
that areconnected often through information
technology.These firms may be suppliers, customers,
and even competing companies.
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Boundaryless Organization
Jack Welch, former CEO at GE (GeneralElectric), stated his
vision for the companyas a boundaryless company, an
open,anti-parochial environment, friendly toward
the seeking and sharing of new ideas,regardless of their
origin.
The purpose was to remove barriersbetween the various
departments as well
as between domestic and internationaloperations.
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Choosing the Pattern ofDepartmentation
There is no one best way of departmentationthat is applicable to
all organizations and allsituations.
Managers must determine what is best bylooking at the situation
they face.The jobs to be done and the way they should
be doneThe people involved and their personalities
The technology employed in the departmentThe users being
servedOther internal and external environmental
factors in the situation
