Organizational Structure - the vertical and horizontal configuration of departments, authority, and jobs
within a company
Organizational Process - the collection of activities that transform inputs into outputs that customers
value
Departmentalization - subdividing work and workers into separate organizational units responsible for
completing particular tasks
Functional Departmentalization - organizing work and workers into separate units responsible for
particular business functions or areas of expertise
Functional Departmentalization Advantages - work done by highly skilled specialists; lowers costs
through reduced duplication; communication and coordination problems are lessened
Functional Departmentalization Disadvantages - cross-department coordination can be difficult; may
lead to slower decision making; produces managers
with narrow
experiences
Product Departmentalization - organizing work and workers into separate units responsible for
producing particular products or services
Product Departmentalization Advantages - managers specialize,
but have broader experiences; easier to assess work-unit performance; decision-making is
faster
Product Departmentalization Disadvantages - duplication of activities; difficult to coordinate across
departments
, Customer Departmentalization - organizing work and workers into separate units responsible for
particular kinds of customers
Customer Departmentalization Advantages - focuses on customer needs; products and services tailored
to customer needs
Customer Departmentalization Disadvantages - duplication of resources; difficult to coordinate across
departments; efforts to please customers may hurt the company
Geographic Departmentalization - organizing work and workers into separate units responsible for doing
business in particular geographic areas
Geographic Departmentalization Advantages - responsive to the demands of different market areas;
unique resources
located close to the customer
Geographic Departmentalization Disdvantages - duplication of resources, difficult to coordinate across
departments
Matrix Departmentalization - a hybrid organizational structure in which two or more forms of
departmentalization, most often product and functional, are used together
Matrix Departmentalization Advantages - efficiently manage large, complex tasks; pool of available
resources
Matrix Departmentalization Disdvantages - requires high levels
of coordination, conflict between bosses, requires high levels of management skills
Simple Matrix - a form of matrix departmentalization in which managers in different parts of the matrix
negotiate conflicts and resources
Complex Matrix - a form of matrix departmentalization in which managers in different parts of the
matrix report to matrix managers, who help them sort out conflicts and problems
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