Decentralized Organizational Structure Departmentalization is an aspect of organizational design where a business divides its staff into smaller units based on tasks within the company. Most companies, including restaurants, are likely to use two or more types of departmentalization at the same time. Restaurants are often organized around the types of food served, the tasks handled by the staff and the chain of command in the company. Other departments may be developed if there are a add-on services such as banquet facilities and catering or if there are several stores within a geographic region.
Types of Departmentalization Used by Business Types of Departmentalization Used by Business 2 February Management Every organisation has certain basic parts that are made up of people who perform, supervise, and plan besides those who render support services and technical advice.
As such, studying the structure or design of an organisation means analysing how these parts are put together, who reports to whom, the degree of centralisation or decision making power concentrated at the top, the extent of rules, policies, regulations, and procedures in the organisation.
We will write a custom essay sample on Types of Departmentalization Used by Business or any similar topic specifically for you Do Not Waste HIRE WRITER The building of the initial structure of an organisation may be based on the conditions prevailing in the society and the industry characteristics prevailing at the time and the personality of the founder entrepreneur.
As the organisations grow in their size from small to large over a period of time, their priorities do change and it becomes necessary for the organisations to make changes in the organisation design in order to ensure that the organisations function efficiently. Very simply, Organizational Structure is the manner in which an organization arranges itself.
An Organizational Chart Some organizations consider their Organizational Charts as confidential, while other organizations most of them, in fact, do not.
Some companies go so far as to post their Organizational Charts on their publicly accessible websites. Other key terms include Centralized and Decentralized Decision Making.
Centralized decision making refers to a business model in which decisions are directed to the top of the organization. Decentralized decision making is a model in which the organization tends to push the decisions down to the lowest levels, which can be a good thing.
Theoretically, such individuals are in a better position to respond to external and internal drivers and make rapid decisions to control those drivers before they get out of hand and negatively affect the organization. Decentralized decision making tends to be a trap, as it may dangerously undermine upper management in the organization.
Nonetheless, decentralized decision making is increasingly accepted as a viable business model today. Yet another key term is one known as Formalization, the degree to which an organization tends to document its processes, rules, and regulations. Centralized and Decentralized Decision Making and Formalization will vary from one organizational structure to another, depending upon the options for change that are open to a company.
Another key term that is familiar in the designing an organization is what we call a Hierarchy of Authority. The concept of Hierarchy of Authority says that an organization must know who is in charge of which elements and who reports to whom.
Of course, this has implications for the division of labour because, under the Hierarchy of Authority, many tasks are divided and distributed across the organization. This process necessarily entails varying degrees of specialization of jobs and tasks, which we see a lot these days as the business environment grows more sophisticated.
Regarding Types of Organizational Structures, I will first critically note that an appropriate organizational structure for any given company is a very elusive animal, indeed.
Every company tends to organize itself differently, so there is no absolute right and no absolute wrong way to design an organization.
Appropriate organizational structure depends upon the unique strategy of the business, its unique customer base, its unique sense of products and services, and its management of these considerations as they are dispersed throughout the enterprise.
The most common organizational types may be classified as Functional Structure, Divisional Structure, Matrix Structure. A Few Common Types of Departmentalization Functional departmentalization — Grouping activities by functions performed. Activities can be grouped according to function work being done to pursue economies of scale by placing employees with shared skills and knowledge into departments for example human resources, IT, accounting, manufacturing, logistics, and engineering.
Functional departmentalization can be used in all types of organizations. Product departmentalization — Grouping activities by product line. Tasks can also be grouped according to a specific product or service, thus placing all activities related to the product or the service under one manager.
Each major product area in the corporation is under the authority of a senior anager who is specialist in, and is responsible for, everything related to the product line. LA Gear is an example of company that uses product departmentalization.
Customer departmentalization — Grouping activities on the basis of common customers or types of customers. Jobs may be grouped according to the type of customer served by the organization.
The assumption is that customers in each department have a common set of problems and needs that can best be met by specialists.
The sales activities in an office supply firm can be broken down into three departments that serve retail, wholesale and government accounts. Geographic departmentalization — Grouping activities on the basis of territory. Process departmentalization — Grouping activities on the basis of product or service or customer flow.
Because each process requires different skills, process departmentalization allows homogenous activities to be categorized. Functional Structure adopting by Telekom Malaysia Berhad The Functional Structure is by far the most popular organizational structure in the business world.
The Functional Structure is how most organizations align themselves into various departments for example, Quality Management, Information Technology, Corporate Communication, Finance, Sales and service.Types of Departmentalization Used by Business Organisations in Malaysia.
Words | 11 Pages. Introduction Every organisation has certain basic parts that are made up of people who perform, supervise, and plan besides those who render support services and technical advice. If the type of departmentalization used by an organization tends to emphasize departmental units rather than the organization as a whole and decision-making is slow, then these would be weaknesses indicative of _____ departmentalization.
The Organization Structure Of Carlsberg Brewery Malaysia Business Essay. The intent of this survey was to look into the relationship between organisational construction of a company and how it can be applied or good to the company that have chosen - The Organization Structure Of Carlsberg Brewery Malaysia Business Essay introduction.
Organizing an organization through departmentalization is common. In this lesson, you'll learn what departmentalization is, some types of departmentalization, and its advantages.
Departmentalization is an aspect of organizational design where a business divides its staff into smaller units based on tasks within the company. Most companies, including restaurants, are likely to use two or more types of departmentalization at the same time.
if the type of departmentalization used by an organization tends to emphasize departmental units rather than the organization as a whole and decision making is slow, then these would be weaknesses indicative of ____ departmentalization.