Differentiate between the four basic types of departmentalization (function, product,

customer, and geography).Distinguish matrix organizations from traditional

departments.Differentiate between team-based structures, networks, and modular
organizations.

Answer

Departmentalization:

The resulting structure of applying the common elements of an organization (common

purpose, coordinated efforts, division of labor, hierarchy of authority, centralization /
decentralization and formulation) is generally function, product, customer, region.

Functional Structure:

As sales increase, organizations generally adopt a functional structure. This structure groups
employees into functional areas based on their expertise. These functional areas often
correspond to value chain stages such as operations, R & D, marketing, and sales. This
includes support areas such as accounting, finance and human resources.

Product Structure:

Companies with diverse product lines often structure by product or service. For example, GE
has built six product-specific divisions supported by six integrated services divisions.

(1) Energy,

(2) Capital

(3) Home & Business Solutions

(4) Healthcare

(5) Air and

(6) Transportation.

The product sector works well when the product is more technical and requires more
specialized knowledge. These product divisions are backed by centralized services including
public relations, business development, law, global research, human resources and finance.

Customer Structure:

Companies that provide services such as medical services tend to use a customer-based
structure. Similar to the structure of the product, but the various business units at the bottom
are each divided into specific customer groups (eg, outpatients, emergency and emergency
care patients). We recommend customizing the service as the customers are very different.
Employees can specialize in the type of customer and be more productive for that type of
customer. The director of each customer center reports directly to the Chief Medical Officer
and / or Hospital CEO.
Geographic Structure:

If your organization spans multiple geographic regions and you need to localize a product or
service, you will most likely need regional organization. Geographical structure involves
grouping by geography, such as sectors in Latin America. Geographical structure is
especially important when tastes and brands react differently to different regions. This can
give you flexibility in your product offerings and marketing strategies. You may also need a
geographic structure for the cost and availability of resources, deployment strategies, and
laws abroad. Coca-Cola is geographically structured for operating costs. NetJets, a
commercial airline, has created another Portuguese company to operate NetJets Europe. The
legal entity had to be owned by a European Union airline.

Matrix Organizations:

Companies use matrix structures when two dimensions are important. For example,
employees are organized by product or region and have two bosses. The idea behind this type
of matrix structure is to combine the benefits of geographic localization with the benefits of
functional structure (responsiveness and distributed focus).

Team-based Structures, Networks, and Modular Organizations:

Team-based structure:

Project teams focus on several goals and are generally dismantled at the end of the project.
Similar to the SkunkWorks® model, the team can be placed in designated spaces and
buildings to enhance communication and collaboration and minimize distractions. The
project team is hierarchical, but generally still includes administrators.

Team:

In general, a team is made up of people with complementary skills who work for a common
purpose. An organization creates a variety of expertise and groups employees into teams in a
way that handles specific operating components of the organization. A team that includes
members from various departments is said to be a cross-departmental team.

Network Structure:

The newest and most diverse team structure is commonly known as the network structure.
The network structure is characterized by little bureaucracy and decentralized decision
making. Managers coordinate and control relationships inside and outside the company. The
social structure of interaction is driven to build and manage formal and informal
relationships. The goal of this structure is to realize the rapid development of the organization
and its adaptation to the changing external and internal environment.
Modular Organization:

Areas or departments that can be easily separated from a company without endangering the
company are considered to have a business module organizational structure. What matters is
the ability to see which modules or departments of the business are effective, which modules
or departments can be outsourced and create a tighter organization.