What is the advantage of departmentalization by customer?
|
Home → Terms → Customer departmentalization Definition (1): Customer departmentalization groups activities and resources in response to the needs of specific customer groups. Definition (2): “Customer departmentalization - Grouping activities on the basis of common customers or types of customers.” Jobs can be grouped based on the customer type served by the company or organization. The concept is that
customers in every department have a common type of needs and problems that may best be solved by specialists. Definition (3): When effectively serving various customer groups is greatly emphasized, this organizational structure or form is applied or used. For example, full-time and part-time students of graduate and post-graduate business programs in colleges and universities generally are different in personal needs and demographic profile. Usually, full-time students attend classes in day shifts and part-time students attend classes in evening or night shifts. The retail and wholesale public is so different in various industries like the customers of the government and non-government sectors. Customer departmentalization has the following advantages:
Functional departmentalization has many advantages and is the most common kind of organizational departmentalization in industries and organizations. It makes supervision convenient, and people working together in one department can fix any issue more conveniently. It emphasizes the roles according to the organization and helps achieve them more efficiently.
Functional departmentalization refers to creating departments in an organization according to their function. It does not depend much on the skill set of the employees but on their expertise and qualification. For example, someone qualified in finance would be a part of the finance department and a chemical analyst is more suited for the quality department according to their expertise. Functional departmentalization has many advantages that make it a favorite structure in medium and large-sized organizations. Advantages of Functional DepartmentalizationConvenienceFunctional departmentalization is one of the simplest methods of departmentalization that does not require extensive strategy-making to design or operate a department. It is easy to set up and operate with a relevant manager to supervise the department. SpecializationFunctional departmentalization allows specialization in that department, leading to increased efficiency and better service. For example, when people in the marketing department work on the same goals and keep digging more strategies to improve the brand’s marketing, everyone’s marketing skills polish and they specialize in their niche. Reduced CostWhile the cost reduction is not directly related to functional departmentalization, it helps the organization by avoiding duplication in the company. Let’s say that the company is not departmentalized; HR might hire two people with slightly different but similar expertise. However, when each department has people with designated roles, duplication of employees with the same skillset for the same function does not occur. Better CommunicationWhen people are working in the same space, they continuously update each other about their progress. The processes work through a proper channel in a department and they communicate better, causing fewer misunderstandings. When such a departmentalization structure is absent, communication issues lead to problems in performing properly. Better SupervisionWhen everyone in an organization works without functional departmentalization and reports to one person only, the supervisor is more susceptible to intermixing problems and their solutions, leading to more issues. However, when each department has a corresponding manager or director who is well-versed in that department, he can not only supervise the employees better, his expertise also helps the employees learn. Improved SkillsBesides the learning from the managers and seniors, new employees gain experience by observing the processes in their department. Activities and pieces of training can be conducted to improve the skills of a particular department with the same functionality without engaging the whole of the organization and disturbing productivity. Optimum Resource UtilisationFunctional departmentalization ensures optimum utilization of human and technological resources. It enables officers in a department to learn better and efficiently utilize available resources to provide positive outcomes. Easy EvaluationDepartmentalization by function makes it easy for the higher hierarchy to evaluate the performance of a department and its employees. Departmental evaluation allows finding out if any particular department lacks resources and productivity and needs better ones. The managers and deputy managers help observe the performance of employees that contributes to appreciation and incentives eventually. The Bottom LineFunctional departmentalization is the easiest form of departmentalization adapted in medium and large organizations with numerous employees expert in different niches. It allows the employees to express their best potential and provides beneficial outcomes to the company. One of the biggest advantages of Functional departmentalization is; it is excellent for the employer and the employee both as it makes performance evaluation and finding a solution to problems for the departments easy. Matthew is a Co-Founder at BusinessFinanceArticles.org. Matthew was a floor manager at a local restaurant in Wales. He lost his job after the pandemic and took initiative to make a team and start the project. Reader InteractionsWhat is customer based departmentalization?Customer departmentalization - Grouping activities on the basis of common customers or types of customers. Jobs may be grouped according to the type of customer served by the organization. The assumption is that customers in each department have a common set of problems and needs that can best be met by specialists.
What is the advantage of customer organizational structure?Focused service is among the main advantages of a customer-based organizational structure. Everyone in each division specializes in serving a specific customer group. It allows them to become more and more skilled and provide the best for their customers.
Which of the following is a disadvantage of departmentalization by customer?The primary disadvantage of customer departmentalization is: that it leads to duplication of resources.
What is an example of customer departmentalization?For example, banking organizations create departments on the basis of customer service like deposits, cash withdrawal, letters of credit, loans, etc. Similarly, a business organization may be divided into customer service like industrial product buyers and consumer product buyers.
|
