Traditional Departmentalization Concepts

Departmentation means the grouping of work activities of the

separate parts of an organization

Function
al
Structur
e

Division
al
Structur

3 Types of e

Matrix

departmentation Struct
ure
 Functional Structure
Advantages Disadvantages

Clear tasks assignments It slows response of time in large

organizations

Easy to explain the role of each unit Causes bottlenecks due to sequential task
performance

It is suited to stable environment Does not encourage innovation, narrow

outlook

Encourage development of expertise Foster conflicts over product priorities

Offers areas of specialization and requires Foster attention on particular area only
little internal coordination

Requires fewer interpersonal skills Managers nor being able to be trained in

a wider field
 Functional Structure

CEO

Marketing Fianance Human Resources

 Divisional Structure
Advantages Disadvantages

It allows for high product/services Need more involvement of personnel

It allows full time concentration on tasks It can be costly

Clearly defines responsibility Create conflicts between divisional task

and corporate priorities

It improves functional activities Foster a politics in resources allocation

coordination

Provide area of development, growth and Employee become so focused that they
diversity in products and services lose sight of boarder organizational
provided objectives
Divisional Structure

Product Divisional

Geographic Divisions

Customer Division
 Divisional Structure

Product Divisions Geographic Division

PepsiCo. Inc. President

Frito-Lay Tropicana Vice

Pepsi Cola Vise President Vise President
Company Products President
West Malaysia Other Regions
Company East Malaysia
Snack Food Juices
 Divisional Structure

Customer Division
Hospital Ampang Putri

Peadiatric Emergency
Pharmacy
Ward Dept
 Matrix Structure
Advantages Disadvantages

Combines the strengths of functional and Risks creating a feeling anarchy

divisional Departmentation

Gives flexibility to organization Encourages power struggle

Involves and challenges people May lead to discussions than action

Develops employee skills Risks duplication of effort by project

teams

Frees top management for planning The unity of command is lost

Allows experts to be moved to crucial

areas as needed
 Matrix Structure

President and CEO

V P Domestic

Vice President Vice President Vice President Vice President

V P Europe Nail Care Cosmetic Hair Care Skin Care

V P Asia