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Terms in this set (39)

Functional departmentalization has the benefit of lowering costs by reducing duplication, but can make cross-department coordination can be difficult. Product departmentalization has the advantage of allowing managers and workers to specialize in one area of expertise. The primary disadvantage of product departmentalization is duplication. Customer departmentalization offers the advantage of focusing the organization on customer needs rather than on products or business functions.

Functional departmentalization
-Advantage: Lowers costs by reducing duplication. -Disadvantage: Cross department coordination difficulties

Product departmentalization
-Advantage: Easy for top managers to assess performance
-Disadvantage: There is duplication of effortCustomer departmentalization - Advantage: Focuses on customer needsDisadvantage: Leads to duplication of resources

Geographic departmentalization
-Advantage: Helps companies respond to market demands
-Disadvantages: Can lead to duplication of resources.

Matrix departmentalization
-creates a hybrid organizational structure in which two or more forms of departmentalization, most often product and functional, are used together. Matrices allow companies to efficiently manage large, complex tasks like researching, developing, and marketing pharmaceuticals or carrying out complex global businesses. Efficiency is the result of avoiding duplication. Another advantage is the large pool of experienced, expert employees available to carry out organizational tasks and project.