Disadvantages of Departmentalization by Function Reduces coordination among

Disadvantages of departmentalization by function

This preview shows page 49 - 51 out of 81 pages.

Disadvantages of Departmentalization by Function Reduces coordination among functions: Since employees work in respective department; therefore, coordination amongst various department is reduced. Slow adaptation to changing environment: When people work for longtime in a department they become use to with the working and their styles become rigid Limits development of managers: Development of mangers is limited to a particular function only 4. Departmentalization by Geography where activities of an organization in a given area or territory are grouped and assigned to a manager. Example: Electricity and gas is supplied by regional organizations, such as local electricity Supply Corporation Advantages of Departmentalization by Geography Emphasis on local market: The local markets can gain benefit as service is provided according to geography. It helps develop that market. Improves coordination: Coordination within the geographical unit is better because all functional departments operate at the geographic region. Face-to-face communication: There is better communication between the service provider and service receiver. Advantages of Departmentalization by Geography BUSINESS AND PUBLIC ADMINISTRATION I Page 49
Image of page 49
Problems of control: As the functions are dispersed, therefore control cannot be exercised effectively Requires more human capital: from the above it is deduced that more people are required. 5. Customer Departmentalization: It is grouping of activities so that these reflect primary interest of the customers in a variety of enterprises. Customer departmentalization is usually found in banking sector. e.g., agricultural banking department will provide loans to farmers. Institutional banking will deal with institutional customers Advantages Encourages concentration on customer needs The focus is on customer satisfaction The staff develops expertise in customer area. Disadvantages Since everybody works in respective area coordination becomes difficult There is underutilization of facilities and labour-specialized workers in customer groups 6. Departments by Product: Grouping of activities on the basis of the products or the product lines of an organization is known as departmentalization by production or product. Sometimes organization may be producing more than one product or services. For example a firm may be producing soaps, detergents, toothpaste etc. So for each product it would have separate department. 7. Matrix Organizations: It is the combination of functional and project or product patterns of departmentalization in the same organization structure. This form of organization is common in research and engineering organization it has been used in product marketing organizations as well.
Image of page 50
Image of page 51

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture