Reviewed by Hammad Naziron Apr 01 2013
Rating:
DEPARTMENTATION BY PRODUCT:
Departmentation by product is used in organization where more than one product is
producing. In Departmentation by product all the sources and authority are placed under the
control of one manager. Departmentalization by product assembles all functions needed
to make and market a particular product are placed under one executive.
For instance,major department stores are structured around product groups such as home
accessories, appliances woman’s clothing, men’s clothing and children clothing.
Structure/Diagram of DEPARTMENTATION BY PRODUCT:
ADVANTAGES Of DEPARTMENTATION BY PRODUCT:
1- Places attention on production.
2- Increase growth of product.
3- Places responsibility for profit at division level.
DISADVANTAGES Of DEPARTMENTATION BY PRODUCT:
1- Requires more persons with general manager abilities.
2- Presents problems of top management control.
