Although companies have much in keeping collectively, in addition they differ in lots of ways. Some companies are large, some are small plus some operate in mere one product area, others operate in lots of diversified areas. Some operate in a little geographic area whereas others conduct business in lots of countries of the planet. To handle these varied objectives, strategies and situations, companies adopt different structures.
Departmentation may be the procedure for dividing the business into manageable subunits. The subunits tend to be known as departments, divisions or sections. So many flexible structures are adopted nowadays to meet the precise needs of the firms. When low priced and efficiency will be the keys to successful goal achievement, fulfillment companies should use functional departmentation. It involves grouping employees in accordance with broad tasks they perform. Normally, separate departments are manufactured for all your key activities of the business enterprise.
For instance, in a manufacturing company, the actions necessary to the existence of the business are production, marketing and finance. However, in non- manufacturing concerns these functions differ. In a transport company, the main element areas could be operations, sales and finance. If the business is large, or put simply, because the company grows major departments could be subdivided. The fundamental idea would be to benefit from specialization.
If the business is big and operates in a well balanced environment, it could afford to formalize the structure. The higher the intensity of competition, the higher would be the amount of decentralization. The higher the volatility of the surroundings, the more decentralized and flexible company needs to be and companies that implement the organizational style appropriate with their strategy could be more effective than the ones that use an in-appropriate style.
The question that what sort of structure is most beneficial does not have any single right answer. This will depend on the problem. Some company need stable systems although some other needed flexible systems. The type of the duty, technology, environment and the requirements of the business members are a number of the factors that influence the look of the structure.