Lacson, Neil Irish A.

HRST - 34

FACILITY LAYOUT AND DESIGN

Activity 3

Topic: Shop Organization

What are the two forms of business organization?

Sole Proprietorship Partnership

A sole proprietorship is a A partnership is owned by two or

business owned by only one more persons who contribute
person. It is easy to set-up and is capital to conduct business. The
the least costly among all forms partners divide the profits of the
of ownership. The owner business among themselves based
faces unlimited liability; meaning, on agreed terms. In general
the creditors of the business may partnerships, all partners are have
go after the personal assets of unlimited liability. In limited
the owner if the business cannot partnership (or Limited Liability
pay them. The sole Partnership, LLC), at least one
proprietorship form is usually partner is a limited partner. The
adopted by small business creditors cannot go after personal
entities. assets of limited partners.

Differentiate the following:

Functional Departmentalization In functional departmentalization, an

organization is organized into departments
based upon the respective functions each
performs for the organization. For example,
a manufacturing company may create a
production department, sales and marketing
department, an accounting department, and a
human resources department.
Process Departmentalization Grouping activities on the basis of product
or service or customer flow. Because each
process requires different skills, process
departmentalization allows homogeneous
activities to be grouped together.

Product Departmentalization  an organizational strategy that divides

employees into teams to work on all
aspects of a particular project or product
line. Every product line has an individual
department or team, and department members
all specialize in different aspects of product
development and distribution.

Customer Departmentalization where the organization's activities are ready

to respond to and interact with specific
customers or customer groups. This
organizational form is used when great
emphasis is placed on effectively serving
different customer types.