Figure 8-1 to Support Learning Objective 8-5: Approaches to Departmentation (continued from page 252 of the text)
Whereas major departments of an organization are established by top-level managers, supervisors primarily are concerned with activities within their own areas. Nevertheless, from time to time supervisors will be confronted with the need to departmentalize within their areas, and they should be familiar with the alternatives available for grouping activities. These are the same options available to top-level managers when they define the major departments. Departmentation is usually done according to function, products or services, territory, customer, process and equipment, ...view middle of the document...
Each supervisor is responsible primarily for an area of operation upon which his or her energy and expertise can be concentrated. Functional departmentation also facilitates coordination since a supervisor is in charge of one major area of activity. It is easier to achieve coordination this way than to have the same functions performed in different departments under different supervisors.
In recent years, many companies have utilized extensive cross-training and multi-skilling of employees in order to develop more flexibility in operations. A flexible workforce is one that has employees trained to handle a variety of skills needed to perform multiple tasks in production, customer-service departments, or processes. This is in contrast to the more traditional functional arrangement where each worker is responsible for only one job, or where each worker performs narrowly defined tasks in the operation. Although developing a flexible workforce can be costly and time consuming, the advantages can be well worth the effort. Supervisors can more easily delegate work to employees who better understand the total departmental functions, and the employees also can assume additional responsibilities and tasks in a more collaborative fashion aimed at getting the departmental work done.
Product or Service Departmentation. Many companies utilize product or service departmentation. To departmentalize on a product basis means to establish each major product (or group of closely related products) in a product line as a relatively independent unit within the overall framework of the enterprise. For example, a food products company may choose to divide its operations into a frozen food department, a dairy products department, a produce department, and the like. Product departmentation can also be a useful guide for grouping activities in service businesses. For example, most banks have separate departments for commercial loans, installment loans, savings accounts, and checking accounts. Many home maintenance firms have separate departments for carpentry, heating, and air-conditioning services.
Geographic (Territorial, Locational) Departmentation. Another way to departmentalize is by geographical considerations. This approach to departmentation is important for organizations with physically dispersed activities. Large-scale enterprises often have divisions by territories, states, and cities. Increasingly, many companies also have international divisions. Where units of an organization are physically dispersed or where functions are to be performed in different locations—even different buildings—geographic departmentation may be desirable. Locational considerations may be significant even if all activities are performed in one building but on different floors. An advantage of territorial departmentation is that decision-making authority can be placed close to where the work is being done.
Customer Departmentation. Many organizations find it...