Organisational Structure Essay

278 Words2 Pages
Describe the organisational structure that results from each of the different bases of departmentalisation. What are the implications of each of these structures for the distribution of authority within the organisation? Functional departmentalisation involves grouping jobs involving the same or similar activities. Each department can be staffed by experts in that area and supervision is facilitated because each individual manager only needs to be familiar with a relatively narrow set of skills. Authority and coordinating activities inside each department is easier. As the organisation grows decision-making can become slower and more bureaucratic and accountability and performance becoming increasingly difficult to monitor. Product departmentalisation involves grouping activities around products or product groups. All activities associated with one product can be easily integrated and coordinated. The speed and effectiveness of decision-making is enhanced. Administrative costs do rise and managers in each department may focus on their own product. Customer departmentalisation involves grouping activities to respond to and interact with specific customers or customer groups. The distinct advantage is that the organisation can use skilled specialists to deal with unique customers however a large administrative staff is required to integrate the activities of the various departments. Geographic departmentalisation involves grouping jobs on the basis of geographic sites or areas. It enables the organisation to respond easily to unique customer and environmental characteristics in the various regions. Allocating authority is another normal outgrowth of increasing organisational size and each of the above structures will experience a degree of difficulty based upon longer chains of communication. Each employee will need to understand their own responsibility,
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