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Structuring an organization is a crucial part of establishing the company’s management style. Departmentalization is part of the business organization that “divides the company into separate divisions” (Nickels et al., 2022, p. 199). There are different ways of departmentalization: geographic, product, function, customer group, by process (Nickels et al., 2022). By examining a company’s size, values, product, markets, and customers, one can understand how and why a particular type of departmentalization has developed in a company.
PepsiCo is a large company that uses several division methods into departments. First, PepsiCo includes more than a thousand different drinks and food brands, which means division by product. Secondly, this company has various branches around the world and holds meetings with key investors in many countries, so PepsiCo uses geographical departmentalization. Thirdly, we can assume a division by customer group because the company cooperates with people directly and with various large retailers, manufacturers, and other institutions.
Walt Disney is a big company, but it makes media products, unlike PepsiCo. Cinematic content production requires more creative freedom for directors responsible for the content creation, targeting various consumer groups. There is a clear division by function, as a considerable part of the company is focused on the entertainment industry, managing Disney parks, and creating merchandise. Furthermore, Walt Disney has a geographical division for some countries in Asia and Europe.
The United Methodist Church has a flatter and broader organization as it relies on expansion through its disciples. It has three main governing bodies – the General Conference, the Council of Bishops, and the Judicial Council. This kind of departmentalization can be characterized as division by function because each institute has its purpose. In addition, there is a geographical departmentalization, as the church has over 12 million followers worldwide.
The organization’s structure and departmentalization depend on its size, corporate ethics and values, and market demands. Currently, different companies use more flexible options for organizing work. If they need more freedom and creativity, broader and flatter organization systems are used. For already established massive brands, departmentalization is geographical and product-based because, for them, it is essential to produce familiar commodities in large volumes.
Reference
Nickels, W. G., McHugh, J. M., McHugh, S. M. (2022). Understanding Business. 12th Edition. McGraw-Hill Education.
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