Geographic departmentalization is the grouping of employees based on their physical location. This type of departmentalization can be helpful when an organization has geographically dispersed customers. For example, a company might have separate departments for North America, Europe, and the Asia Pacific.
What is geography departmentalization?
Geographic Departmentalization Geographic Departmentalization is the process of grouping activities on the basis of territory. If an organization’s customers are geographically dispersed, it can group jobs based on geography.
What is departmentalization and its types?
Departmentalize also refers to an organization’s formal structure that includes several departments and positions and their respective relationship with each other. What is Departmentalization? #1. Functional departmentalization #2. Geographic departmentalize #3. Product departmentalize #4. Process departmentalize #5. Customer departmentalization
What are the disadvantages of geographic departmentalization?
The structure of Geographic departmentalization is more costly than other types of departmentalization. Scarcity of resources in some companies may result in unhealthy competition among various divisions. The discrepancy in the expertise of employees within the organization.
When a company organizes departments along geographic lines?
When a company organizes departments along geographic lines, it is called geographic departmentalization. Multinational firms have their offices all around the world, and they have created departments based on the regions to handle company activities.
What is a geographic organizational structure?
What is a geographical organisational structure? A geographical organisational structure suits businesses that have offices or units in different regions or geographical areas. This form of structure enables businesses to: have a reporting and functional system across multiple locations.
What is the difference between geographical and functional Departmentalisation?
(1) FUNCTIONAL DEPARTMENTALIZATION : Functional departmentalization defines departments by the functions like accounting or purchasing. (2) GEOGRAPHICAL DEPARTMENTALIZATION : Geographical departmentalization is an arrangement of departments according to geographic area or territory.
What is geographical structure example?
Geographical Structure Company Example For instance, a midsized retail chain or fast-food chain with multiple outlets across the state may organize on a geographic basis. This type of structure is well-suited to businesses like hospitality, retail and transportation that need to be near customers or sources of supply.
Which of the following is an advantage of geographic departmentalization?
Which of the following is an advantage of geographic departmentalization? It can reduce costs by locating unique organizational resources closer to customers.
What is functional Departmentalisation?
Functional departmentalization is an organizational structure where business leaders divide teams according to the professionals' areas of specialization.
What company uses geographical organizational structure?
Geographic organizational structures work best with strong leadership in a company, in which management and employees share a vision. Daimler AG, for instance, has its headquarters in Stuttgart, Germany, and has manufacturing facilities in several European locations, and has sales divisions all over the world.
What are geographic features?
Geographical FeaturesMountains and Foothills. First, let's look at the tallest geographical structures on the planet: mountains. ... Plateaus. Another feature of elevation is the plateau. ... Mesas. Another flat-topped elevation is the mesa. ... Valleys. ... Plains. ... Deserts. ... Basins. ... Oceans.More items...•
What are the 4 types of organizational structures?
The four types of organizational structures are functional, divisional, flatarchy, and matrix structures.
What is departmentalization?
It is typically used to describe different company areas or discuss the various departments within a company. Departmentalization divides an organization into different departments to improve communication, coordination, and overall productivity. It also helps to clarify who is responsible for what tasks and allows for better delegation of duties.
Types of departmentalization
There are different types of departmentalization, each with its advantages and disadvantages. To make the best decision for your organization, it’s essential to understand the different types of departmentalization and what they entail.
Conclusion
We hope this article has given you a better idea of the different types of departmentalization and how they work. If you found it helpful, please make sure to share it with your friends! And don’t forget to subscribe for more updates from us on every aspect of a business.
What is differentiation in an organization?
Differentiation refers to the different units that work on different kinds of tasks with the use of different skills and work methods in an organization. These differentiated units are combinedand coordinated into an overallproduct for the purpose of achieving the organization’s mission as the result of integration.
What is the best departmentalization for Starbucks?
Going through Starbucks case study, the best suited departmentalization for Starbucks would be by Geographic Region. Starbucks has its financial affairs, legal affairs separated from stores. It has also added talent management, human resources and training and development as part of being specialized departments. This structure works
What are the concepts around which organizations are structured?
concepts around which organizations are structured are differentiation and integration” (2011, pg. 227). Differentiation refers to the different units that work on different kinds of tasks with the use of different skills and work methods in an organization. These differentiated units are combinedand coordinated into an overallproduct for the purpose of achieving the organization’s mission as the result of integration. The two fundamental concepts indicate how the organization
What is Cynthia Duff MGT330?
Cynthia Duff MGT330: Management for Organizations Instructor: James Worsley October 13, 2014 Case Study: Starbucks’ Structure Starbucks Coffee, we all know the name and most love the coffee and atmosphere it brings to our daily lives. Starbucks started out like most organizations a small coffee shop in 1971 in Seattle’s historic Pike Place Market and grew. This small shop started out as a single owner who the employees answered to which is known as departmentalization by function and has now grown to
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What is geographic departmentalization?
Geographic departmentalization is creating departments in the geographic areas they service. Coca-Cola is a company that operates using geographic departmentalization. They have 6 operating regions: Eurasia & Africa, Europe, Latin America, North America, Pacific and Bottling Investments – in addition to Corporate (Unknown, 2011).
What is departmentalization in business?
Departmentalization is the process of grouping specialized jobs into logical units (Griffin, 2013). When deciding what departmentalization type is best for a company managers are faced with several decisions/dilemmas. The following should be considered: • The products they produce
Departmentalization by Territory or Geography
Departmentalization by territory is when the creation of the departments of the organization is on the basis of territory or geographical or regional areas. The regional areas may be western, eastern, central, etc. Territory departmentalization applied to provide a better quality of services all over the nation throughout the territories.
Disadvantages of Territory Departmentation
In territory departmentation, there may be a problem of integration of various regional offices.
What is geographic division?
The geographic divisional structure allows companies to organize geographically instead of centralizing. This provides each division with the autonomy regarding logistics to achieve maximum efficiency. Each division may make their own decisions based on local preferences, markets and requirements. This includes decisions related to:
What is Geographical Organizational Structure?
What Is a Geographical Organizational Structure? An organizational structure is how a company structures and establishes its operations. The structure determines how the company groups people and positions, lines of communication, chains of command, the relationships between positions, distribution responsibilities and levels of accountability. ...
What is the potential conflict between divisions in companies with geographical organizational structures?
Potential conflict. The divisions in companies with geographical organizational structures often have autonomy to make their own decisions. However, this decentralized approach to decision making may cause conflicts between local division management and central or corporate management at headquarters.
What is the role of managers in the local divisions of businesses?
The local divisions of businesses with geographical organizational structures require managers with effective leadership at each location. This provides managers with the opportunity to complete on-the-job training and gain valuable experience. These leadership opportunities train managers how to lead at the top of the chain of command, preparing them for potential C-level positions within the company.
Why do large corporations use geographical organizational structures?
Large corporations may choose a geographical organizational structure to allow them to better serve the specific needs or desires of distinct groups. They may create geographic decisions based on different:
Why are geographic organizations more expensive?
These structures may use more resources, especially with duplicate infrastructures or activities within the organization. Companies with this organizational structure may sacrifice economies of scale. Production may increase, but costs may also increase.
Why are local divisions important?
The local divisions created by geographical organizational structures often allows for improved customer communication. Local managers can maintain a regional focus, tailoring the division's operations to best fit the needs and demands of the local customers.
What is departmentalization in business?
Departmentalization is defined as a process that groups activities into different departments. These departments are created so that tasks can be performed by specialization within the organization. You will find it in both private and public organizations.
Why do organizations encourage departmentalization?
An organization encourages departmentalization to increase its efficiency and productivity. The factors that are considered to create suitable departments are as follows-. #1. Specialization. Specialization helps the workers to become experts in their field so that it can maximize efficiency.
Why is functional departmentalization important?
Functional departmentalization is beneficial for the company as it integrates expertise and maximizes efficiency and productivity. As all related activities are conducted by a group of like-minded and shared knowledge and skilled people in one place, you can expect specialized activities and great results.
What are the benefits of departmentalization?
Advantages of using it 1 Departmentalization is an effective grouping that enables meaningful work 2 It is easy to coordinate different work in the same department 3 Departmentalization results in the integration of work 4 Achieves economic advantage 5 Departmentalization enables utilization of local conditions via low operational costs 6 Simplifies training 7 Utilizes special skills and specialized training to increase personal as well as company productivity 8 Departmentalization helps the company to gain the benefit of specialization 9 There is a feeling of autonomy as the manager is granted the power to take independent decisions 10 It increases the chance of growth and expansion 11 Departments are created to fix the role of every person involved. Responsibilities are clear and precise, and every person is now accountable for his/her action 12 All departments are specific, and workers within it have a greater chance of uplifting and further learning of the skills. It actually acts as on-the-job training. If the manager comes across someone in his group who he thinks to need specialized training, he can easily arrange for it. 13 It becomes easy to evaluate managerial performance as tasks are allotted department wise. 14 Departmentalization results in better administrative control.
Why do companies have separate departments?
When you create separate departments, it increases the cost of a company in terms of personnel, equipment, and additional space. The number one priority of an organization is to utilize its physical amenities to achieve maximum economy while creating necessary departments.
When a company organizes departments along geographic lines, it is called?
When a company organizes departments along geographic lines, it is called geographic departmentalization. Multinational firms have their offices all around the world, and they have created departments based on the regions to handle company activities.
Who is responsible for delegating duties and tasks to the employees in a department?
The departments are headed by senior executives who are also known as managers in some cases of their department. They are responsible for delegating duties and tasks to the employees in their department. The employees of every department are accountable to their department head for their performance.