What Is Product Departmentalization?


2 Answers

Hannah Barton Profile
Hannah Barton answered
Product departmentalization is used in large companies that have many departments who wish to structure their employees under a product departmentalization system.

Key features of a product departmentalization when used in a company;

  • Each manager only deals with one product that the company offers. Sometimes these are split into areas such as womenswear, menswear and childrenswear in a clothing company.
  • Each product area will have a marketing team that deals solely with that one product area but will converse and mix ideas with other product areas.
  • Each product will be responsible for their own finances and budgets and will have their own finance team.
  • All of the different product areas will have different goals and aims.
  • The various areas will only cross as a wider company wide group on matters that concern the entire company such as brand awareness and total company sales goals and achievements.
These companies will have areas that will look after all products such as human resources and information technology.

This model is usually used in companies that have various products that do not really overlap and different offerings that would not benefit by having everyone work on lots of areas. These are usually large companies and each product area could potentially become a company in their own right.

This structure helps with the reporting of the company and helps to detect areas that are doing well and areas that are struggling. This means that more help can be given when there is an area in need of support, whatever part of the product area that may be.

Companies that use product departmentalization claim that the divide gives them better focus from their employees and therefore each area is more productive and has more achievements by working individually.
Anonymous Profile
Anonymous answered
Grouping all functions associated with a single product or line together. Whether it's a service or a product, everyone working on the same one will be grouped, and a manager will be placed over this group.

Answer Question