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, time, or
matrix design.
Functional Departmentation. The most widely used form of
departmentation is to group activities by function—the jobs to be done.
Consistent with the idea of specialization and division of work, activities that
are alike or similar are placed together in one department and under a single
chain of command. For example, word processing, data-entry, and
duplicating services may be grouped together into a clerical department or
information processing center; sales and promotional activities into a
marketing department; manufacturing assembly work into a production
department; inspection and monitoring activities into a quality control
department; and so on. As an enterprise undertakes additional activities,
these new activities—for the most part—are simply added to the already
existing departments.
Functional departmentation is a method that has been and still is
successful in most organizations. It makes sense since it is a natural and
logical way of arranging activities. Grouping departments along functional
lines takes advantage of occupational specialization by placing together jobs
and tasks that are performed by people with the same kinds of training,
experience, equipment, and facilities. 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, customerservice 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 decisionmaking authority can be placed close to where the work is being done.
Customer Departmentation. Many organizations find it advisable to group
activities based on customer considerations. The paramount concern here is
to service the differing needs and characteristics of different customers. For
example, a university that offers evening programs in addition to day
programs attempts to comply with the requests and special needs of parttime and full-time students. Companies may have special departments to
handle the particular requirements of wholesale and retail customers. Major
department stores may attempt to reach different segments of the buying
public, such as customers for a “bargain basement” or lower-priced division
at the one extreme and an exclusive high-priced fashion division at the other
extreme. Most hospitals have separate units for outpatient services.
The importance of maintaining close customer relationships in today’s
competitive climate is well recognized by most organizations. Supervisors
often are the key representatives in the effort to build strong interpersonal
relationships with customers. Coordinated efforts to communicate and build
trust with customers has been referred to as customer relationship
management (CRM). This type of effort may be spearheaded by the
marketing/sales department, but supervisors from other departments with
customer linkages are usually expected to be part of whatever processes are
appropriate and helpful to build customer goodwill and loyalty.
Process and Equipment Departmentation. Activities also can be grouped
according to the process involved or equipment used. Since a certain amount
of training and expertise are required to handle complicated processes and
operate complex equipment, activities that involve the use of specialized
equipment may be grouped into a separate department. This form of
departmentation often is similar to functional departmentation. For example,
in a machine shop department, specialized equipment is used but only
certain functions are performed; function and equipment become closely
allied. A data processing department utilizing a mainframe computer may
serve the processing requirements of a number of operations and
departmental needs throughout an organization.
Time Departmentation. Another way to departmentalize is to group
activities according to the period of time during which work is performed.
Many organizations are engaged in round-the-clock operations and
departmentalize on the basis of time by having work shifts. Activities are
departmentalized by time (day, afternoon, night shift), although the work
operations of all the shifts for the most part may be the same. Here, too,
there may be an overlap in the departmentation process. Where time is a
partial basis for departmentation, it is likely that other factors will be
involved. For example, a maintenance division—based on function and
services—may be further departmentalized by shifts, such as the
maintenance night shift. Shift departmentation can create organizational
questions of how self-contained each shift should be and what relationships
should exist between regular day-shift supervisors and the off-shift
supervisors.
Shift work also can contribute to numerous other employee problems
and concerns, including personal safety, sleep deprivation, child care, and
work/family conflicts. Night-shift workers often perceive that they are viewed
as “second-class citizens” who have limited access to the training and
development opportunities afforded to day-shift personnel. Supervisors of all
shifts need to be cognizant of and sensitive to these types of shift workers’
concerns. It may be possible for supervisors to coordinate certain types of
scheduling rotation, training opportunities, and other efforts (perhaps with
the assistance of the human resources department) designed to raise and
maintain shift worker morale and job performance to acceptable levels.
Mixed Departmentation. In order to achieve an effective structure, a
supervisor may have to apply several types of departmentation at the same
time. This is referred to as “mixed” departmentation. For example, there may
be an inventory control clerk (functional) on the third floor (geographic)
during the night shift (time). In practice, many organizations have a
composite departmental structure involving functional departmentation,
geographic departmentation, and other forms. All of these alternatives may
be available to supervisors to facilitate the grouping of activities in their
departments (see accompanying Figure).
There are some departments in which additional subgroupings are not
needed. However, supervisors of departments of considerable size may find it
necessary to divide various jobs and skills into different groups under a lead
person or foreman, who in turn will report to the supervisor. Whatever
structure is chosen, the purpose of departmentation is not to have a
beautiful, well-drawn organization chart. The purpose is to have a sound
structure that will best achieve the objectives of the department and the
entire organization.