Other forms of departmentalization

There are several other ways in which an organization could be departmentalized. These include among others:

•    departmentation by customers—here activities are grouped so that they can serve the needs of specific customers. Used in businesses where customers have heterogeneous characteristics e.g. foreign and local buyers, domestic and industrial consumers or even in hospitals according to patient needs.

•    manufacturing firms also often group activities around a process or type of equipment—here people and materials are brought together in order to carry out a particular operation.

•    departmentation of sequence occurs when a sequence of numbers or other identifying characteristics defines the separation of activities.

Note

The discussion above has considered bases of departmentation in their pure form, but in reality most organizations use multiple or combined bases. A firm could, for instance use product departmentation at the top but departmentalize each product group by function. Each marketing department could then be broken down by location. Bases of departmentalization could also be mixed at the same level.