INTRODUCTION TO DEPARTMENTATION BY PRODUCT AND CUSTOMER

INTRODUCTION

We discussed two forms of departmentation last week. These were the departmentation by enterprise function and Geographic/territorial forms of departmentation. We noted their distinctive advantages and disadvantages. This is necessary so that a manager who wants to adopt any or the two of them will appreciate their values and the extent to which they will meet his organizational objectives.

We are still having other forms of departmentation to go through. Remember we made a comment that forms of departmentation are many. We are going to take, at this stag of our course the principal ones among. It is for this reason that we are discussing the product and customer forms of departmentation in our unit present. Again these forms departmentation like the ones we discussed in our last unit (departmentation by enterprise function and Geographic/territorial form of departmentation) have their relative advantages and disadvantages as well. We shall treat all these and more concerning this aspect of our discussion.

One other preliminary remark I will further bring to your attention is that we are still discussing the management function of organizing. I did stress that the function has many facets that compose it. And we stressed that this is one of the functions of management where the conceptual and design skills of management are applied. And the function of organizing demands creativity in fashioning the favorable environment conducive to human efforts.

 OBJECTIVES

By the end of this unit, you should be able to:

• Describe product and customer forms of departmentation 
• List and explain the advantages and disadvantages of product and customer types of departmentation 

 Product Departmentation

Product departmentation is the identification of necessary activities for the production and sales of product. These activities are then grouped and assigned to managers along product lines. This is a strategy and it is a way that top level management uses to delegate to a lower level extensive authority. The authority is used not only to produce and to market but also to carry out the required engineering and services associated with the products. Consequently, each manager is responsible for every issue that has a bearing in respect of the product that has been placed under him.

See the diagram below.