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Organizational Design, Diagnosis, and Development. Session 6 Departmentation, I. Objectives. To examine functional structure and its effects To review the value of functional groupings To consider departmentation by product, region, & client To review the value of divisional groupings.
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Organizational Design, Diagnosis, and Development Session 6 Departmentation, I
Objectives • To examine functional structure and its effects • To review the value of functional groupings • To consider departmentation by product, region, & client • To review the value of divisional groupings
Functional Structure Grouping by Activity
Effects of Functional Structure • Provides for common supervision • Defines boundaries for resource sharing • Defines local goals & basis for measuring achievement • Provides for better internal coordination
Advantages to Functional Structure • Foster professional identity • Clarify supervisory roles • Enhances opportunities for expertise to flourish • Provides specialization & expertise to other departments
Disadvantages to Functional Structure • Promotes between group differences • Sets environment for territoriality & conflicts • Makes performance more difficult to trace • Makes generalists more difficult to develop
Product Structure Grouping on Product Similarity
Geographic Structure Grouping on Regional Proximity
Client Structure Grouping on Market Similarity
Advantages of Divisional Structure • Provides for better coordination between units within division • Provides for expansion with control • Provides for specialized treatment • Allows better control systems • Gives more autonomy to management
Disadvantages to Divisional Structure • Duplication among departments • Reduces specialization • Encourages competition among divisions
Backwards & Forwards • Summing up: Today we looked at various ways to form groups in organizations from functional to product, regional and client based. With the costs and benefits the costs and benefits were considered. • Looking ahead: Next time we’ll consider mixed groupings and multinational forms. As well as dealing with strategic issues in redesign.