1. Organizational Design, Diagnosis, and Development Session 6 Departmentation, I

2. 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

3. Functional Structure Grouping by Activity

4. 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

5. Advantages to Functional Structure Foster professional identity Clarify supervisory roles Enhances opportunities for expertise to flourish Provides specialization & expertise to other departments

6. 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

7. Product Structure Grouping on Product Similarity

8. Geographic Structure Grouping on Regional Proximity

9. Client Structure Grouping on Market Similarity

10. 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

11. Disadvantages to Divisional Structure Duplication among departments Reduces specialization Encourages competition among divisions

12. 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.