Departmentalization is an aspect of organizational design where a business divides its staff into smaller units based on tasks within the company. Most companies, including restaurants, are likely to use two or more types of departmentalization at the same time. Restaurants are often organized around the types of food served, the tasks handled by the staff and the chain of command in the company. Other departments may be developed if there are a add-on services such as banquet facilities and catering or if there are several stores within a geographic region. Show
Regional Groupings for a Restaurant ChainRegional grouping is likely to be used in a restaurant chain where more than one branch of the same chain exists in a region, city or county. For example, the 25 percent of McDonald’s restaurants that are not franchises are managed by a hierarchy of staff, including area supervisors. Each area supervisor is responsible for the performance of a group of stores within a specific geographical area. Staff Functions in a RestaurantFunctional departmentalization in a restaurant allows the separation of sales and marketing tasks from those jobs connected with operations. Sales would fall under the role of a server assisting customers and helping them select an enjoyable meal while operations in a restaurant centers on the preparation of food. In this scenario, management may have difficulty deciding where to include staff that makes and serves drinks at the restaurant’s bar, because they are involved in both activities. Products and Services OfferedDepartmentalization according to product type could work in various way depending on the size of the restaurant. Activities and costs related to food preparation and service might be separated from those that related to the preparation and serving of drinks. In large restaurants, the kitchen may be divided into preparation sections such as salads, grilling station, side dishes and desserts. In this type of departmentalization, the bar becomes a separate department from the dining area or kitchen, a logical method of categorization in this industry. Chain of CommandChain of command departmentalization works when the restaurant is large enough to require more than one management division. For example, roles may be divided into front of house and back of house. The manager who oversees servers, food runners, bartenders and hostesses will be in charge of the front of the house. The back of house manager will oversee workers such as chefs, cooks, and dishwashers. In some instances there may also be a General Manager or Owner who will oversee the entire operation and staff. Types of CustomersCustomer departmentalization works by dividing the organization around the different types of customers. In a restaurant environment, this could take the form of individual customers versus catering for corporate clients and hosting group events. One group of staff may handle the day-to-day operations of the restaurant, while a separate group manages the catering arm of the company, whether on the premises or outside. Departmentalization like this would effectively also be functional and possibly chain-of-command departmentalization at the same time. Combined Departmentalization of a RestaurantDepending on the size of a restaurant, it may use two or more types of departmentalization. A chain may split its operation along the lines of both product and chain of command by having a food department and a beverage department, with food reporting to the chef while beverage reports to the licensee. A smaller restaurant may use functional departmentalization, such as kitchen operations versus customer service, and combine this with process departmentalization. This would result in the kitchen staff, already defined by function, being further divided into segments. Some kitchen staff would focus on actual cooking and food preparation while others would assist with more service related tasks like dressing salads and plating desserts for delivery to guests. Learning for "What are organisational structure?" Some starting thoughts: When two or more people come together; to work to achieve a common purpose or to achieve objectives, we have the basis of an organization. �Often, the next step is to establish what must be done and by whom � such as functions to be performed, where these will take place, people involved etc all of which leads to thinking about how the organization will be structured and how it will operate. A Definition Organizational structure refers to the formal definition of tasks, jobs, work units, people, and resources in a business/organization and the relationships between these. What is Organizational Structure? Why is it Important? Departmentalization Grouping related functions into manageable units to achieve the objectives of the enterprise in the most efficient and effective manner is traditionally referred to as departmentalization. �The primary forms of departmentalization are by function, process, product, market, customer, geographic area, and sometimes matrix (also called project organization). In many organizations, a combination of these forms is used. Structure shapes the effectiveness of an organization in terms of inter-departmental working relationships, product and service development lead times, quality, efficiency, and responsiveness to customer demands. It also influences individual employee and working team morale, motivation, commitment, and satisfaction. Different Types of Organizational Structures By Function Perhaps the oldest and most common method of grouping related functions is by specialized function, such as marketing, finance, and production (or operations). Sometimes this form of departmentalization may create problems if individuals with specialized functions become more concerned with their own specialized area than with the overall business.
By Process Departmentalization can also take place by process. This type of structure is often found in large process or manufacturing companies,
By Product Whenever specialized knowledge of certain products or services is needed, departmentalisation by product may be observed. This usually occurs in large diversified companies.
By Market When a need exists to provide better service to different types of markets, departmentalisation by market may be the appropriate form. Below is an example of a business serving non-profit markets, which uses the market form of departmentalisation,
By Customer Sometimes key or major customers warrant departmentalisation by customers or groups of type of customers. This is often the case in banks, financial institutions or service industries such as marketing, advertising and insurance.
By Geographic location When organizations are spread throughout the world or have territories in many parts of a country, departmentalisation by geographic area may provide better service to customers and be more cost effective.
Combination of Organization Structures Divisional In reality, organizations of any size may employ multiple types of structure using various combinations of the elements covered on the previous slides.
Multiple Many organizations, particularly large, physically dispersed and diversified organizations, utilize several different forms of departmentalization.
Matrix Departmentalization by matrix, or project, has received considerable use in recent years, particularly in such industries as aerospace (e.g., NASA). Staff with different backgrounds and experiences appropriate to the project are assembled and given the specific project to be accomplished within a certain time period.
Other Aspects of Organizational Structure A note on Centralization v decentralization Centralization and decentralization involve the principle of delegation of authority. When a limited amount of authority is delegated in an organization, it is usually characterized as centralized. When a significant amount of authority is delegated to lower levels in the organization, the business is characterized as decentralized. Centralization and decentralization are opposites, and there are different degrees of each. In a highly centralized organization, employees at lower levels have a limited range of decision-making authority. The scope of authority to make decisions in decentralized organizations, by way of contrast, is very broad for lower level employees.
Emerging Organisational Structures Each new generation of technology creates new opportunities to redesign or rethink organizational structure. The acceleration of change requires flexible structures that can rapidly incorporate and adapt to technological and process changes. Whilst backbone structures (such as the ones we have looked at in this document) focused on strategic management as well as provision of administrative and support functions will still exist; there will be a growing use of informal structures (task oriented), to include project teams (actual and virtual), matrix structures, collaboration networks, and others that work within and across the organizational hierarchy. Technology fulfills the communication and coordination functions that once were accomplished through a formal chain of command. Organizations are no longer limited to one design presumed to be right for all circumstances. They can adopt whatever informal structures are needed to meet current operations and dismantle them when the requirements change. This enables large organizations to act like small ones in dealing with change. They do not have to overhaul a large infrastructure. Using informal structures, they can experiment and adapt on a small scale before making large resource commitments; they can also redirect personnel quickly and avoid the cost of overall restructuring. Virtual Organization (Food for thought) Organic or Open Organization The usual goals for organizations are high productivity and efficiency.� Organizations are seen as reliable machines and employees are considered to be sub-machines or constituent parts of the machine.� This type of organization requires stable environment in which it operates and it is not subjected to rapid change and development.� The emergence of globalization and the high connectivity through telecommunication channels has on the one hand provided the firms with opportunity in the shape of new markets.� On the other hand, this also has its adverse consequences in that it encourages the threat of substitute products and services, usually from small and medium sized firms, operating in manufacturing and service industries and communities at much reduced costs.� The environment therefore becomes turbulent and subject to rapid change.� Well documented and established rules, stringent policies and procedures for business processes and manufacturing regimes become hurdles that undermine the ability of organization to adapt to the changes in the environment quickly and effectively. Organic organization philosophy promotes the encouragement of creativity of individuals.� It is based on the hypothesis that productivity and adaptability to rapid change is increased when employees are placed at the centre of their environment and they are allowed to manage themselves and their resources.� When their creativity is accounted for and rewarded.� When their continuous development is encouraged through provision of opportunities and resources.� This type of system or organization allows for the de-centralization of jobs.� Formal procedures are de-emphasized. Modular Organization Modularity in organization changes the traditional hierarchical structure to form loosely coupled networks of organizational actors. The underlying idea is that these loosely coupled actors or objects would quite easily form and reform organizational components that are loosely coupled. The idea of modularity in organizational structure goes hand in hand with idea of modularity in software development.� One of the software engineering goals for software design is that we should design software applications in a highly modular fashion.� Computing applications should be made of components that are highly modular.� That is each components should do one thing and one thing only.� For example in a Human Resource Management application a component may be responsible for creating Wage Slips.� This is a tangible and of value business process and outcome.� The same component should not also manage employee schedule.� It should be modular. �Furthermore, software components should be loosely coupled. That is if we change the internal structure or implementation of one of the components, this does not adversely affect the performance or functionality of other components that it interacts with.� In other words these components should be loosely coupled.� In building systems we endeavor to build solutions made up of components that are highly modular and loosely coupled. These are organizations where non-core functions are likely to be sub-contracted or outsourced.� This is a direct effect of the use of technology and telecommunication channels for doing business.� Using affordable technology and connectivity, companies can maintain relationships with business partners at lower costs than ever before.� This also has an impact on the product in that such organizations tend to build products or services that are highly modular.� These organizations concentrate on their core capabilities and build alliances and joint ventures.� In summary Other Aspects of Organizational Structure - A note on centralization v decentralization Characteristics of Decentralized Structures
Some emerging trends are significant
� Business areas/functions are increasingly accountable for the value they create for the customer. � Business boundaries are blurring as electronic networks tie business partners, suppliers and customers more closely together. � Activities are becoming more distributed, business wide (and sometimes worldwide). � The size and importance of premises such as centralized business headquarters is decreasing. Acknowledgements Classifications and some diagrams in this document are derived from: Montana, P. and Charnov, B. Management: A Streamlined Course for Students and Business People. (Hauppauge, New York: Barron�s Business Review Series, 1993), pp. 155-169. What kind of departmentalization happens when an organization is divided into operations categorized by tasks performed by employees?FUNCTIONAL DEPARTMENTALIZATION It groups jobs according to function. Functional departmentalization defines departments by the functions each one performs such as accounting or purchasing. Every Organization must perform certain jobs in order to do its work.
What are the 5 types of departmentalization?The primary forms of departmentalization are by function, process, product, market, customer, geographic area, and sometimes matrix (also called project organization).
What is an example of geographic departmentalization?For example, the organization structure of Coca-Cola has reflected the company's operation in two broad geographic areas – the North American sector and the international sector, which includes the Pacific Rim, the European Community, Northeast Europe, Africa and Latin America groups.
What is functional Departmentalisation?In functional departmentalization, an organization is organized into departments based upon the respective functions each performs for the organization. For example, a manufacturing company may create a production department, sales and marketing department, an accounting department, and a human resources department.
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