What type of Departmentalisation coordinates the work and employees in different units based on different regions?

1. Career development
2. Departmentalization vs. Specialization: Key Differences

By Indeed Editorial Team

Published November 16, 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Dividing tasks among employees is an important topic in the structure of an organization. Both departmentalization and specialization are tools that organizations use to divide tasks. Understanding how these two tools differ and when to use them can improve how an organization functions. In this article, we explain what departmentalization and specialization are, the advantages of each and their six key differences.

What is departmentalization?

Departmentalization is an organizational framework that groups multiple small tasks together into a single unit based on a shared set of criteria. These departments have a manager or management team that oversees the tasks in their area and communicates with management from other teams. There are several ways to categorize a workplace by department, such as:

• Function: Departments grouped by function sort employees by the tasks they're completing. Companies that have departments for advertising, research and finance are examples of functional division.

• Product: A product departmentalization creates branches for each type of product a company makes. If a toy factory has a dolls department, a games department and an outside toys department, they're separating labor by product.

• Geography: Departments characterized by geography separate groups either by location or where they perform services. If you work as a telephone customer support operator for the Southwest region of the United States, your company uses geographical departmentalization.

• Process: Some organizations create departments based on which step of the product or service an employee completes. For example, manufacturing companies may divide labor by the various steps in the building process, such as welding or quality control.

• Customer: A department can group itself by what kind of customers it serves. If a sales company has a department for individuals and one for companies, they use customer departmentalization.

A company can use multiple types of departmentalization for its employees. For example, it may organize the overarching branches by function, but divide employees within those branches by geography.

Related: Functional vs. Product Departmentalization: What's the Difference?

Advantages of departmentalization

A major advantage of departmentalization is its ability to allow organizations to grow. When a company reaches a certain size, operations become too big for one person to supervise. Creating separate departments allows for multiple managers to oversee their tasks and coordinate with each other.

Departmentalization also improves the ability to appraise the efficiency of particular parts of a company. If you work at a company that has departments based on geography, you may determine that the employees in your east coast division are more efficient than those on the west coast. This allows you to compare the two departments and determine how to improve the west coast's efficiency.

What is specialization?

Work specialization, also known as division of labor, is the act of separating a job into smaller and simpler individual tasks. For example, if you're building a doghouse with your friends, you can cut the wood, ask one of your friends to nail the wood together and let another friend paint the doghouse. Specialization allows you to save time since different people can perform multiple steps of a project at the same time.

Read more: What Is Specialization of Labor? (With Benefits and Examples)

Advantages of specialization

Specialization is useful because it can simplify jobs and decrease the time it takes to complete them. Separating tasks allows you to perform all the steps in a large project simultaneously, increasing efficiency. Specialization also lets you assign easier or harder tasks to team members with relevant experience. If a company makes televisions, dividing the labor means a professional engineer can develop the circuitry inside the TV, while a less experienced person can put the pieces together.

Related: What Does Job Function Mean?

Departmentalization vs. specialization

Both departmentalization and specialization are ways to divide labor and make organizations more efficient. However, these two organizational structures differ in some key ways. These are some differences between departmentalization and specialization:

Function

While departmentalization and specialization address the same goal of improving efficiency, they work by using opposing methods. The function of specialization is to separate a bigger assignment into more manageable pieces. Departmentalization's function is to gather smaller tasks together and categorize them according to a theme.

Versatility

Both departmentalization and specialization organize a task or series of tasks by using a particular process. Specialization only divides a job into simpler objectives. Departmentalization can categorize its departments in multiple ways, such as product or process. This makes departmentalization a more versatile organizational system since you can execute the process in different ways.

Scale

While work specialization focuses on simplifying a single objective into simpler tasks, departmentalization organizes multiple different objectives into separate categories. Specialization often works on a smaller scale than departmentalization. Specialization increases the efficiency of one project at a time, while departmentalization can affect several projects at once.

Sequence

Organizations often use specialization and departmentalization together, in a specific sequence. First, they use specialization to divide large projects into smaller individual tasks. Then they group tasks together by criteria, such as function or geography, to form departments. Typically, specialization occurs before departmentalization.

Structure

When using departmentalization, teams usually work together on a similar product, geography or customer base. While there's usually a command structure, members of the same team often collaborate to solve problems or complete projects. The structure of specialization is more linear. One person completes an assigned task, then sends the project to a different person who completes their assigned task. There's a direct connection between the employee's actions but less collaboration.

Related: 9 Types of Collaboration You Can Use in the Workplace

Repeatability

As an organization grows, it can add departments to increase efficiency. Theoretically, there's no limit to how many times you can use departmentalization. Once you break a job down to its most basic tasks, there's no more need to specialize. Specialization is most effective when used sparingly, while departmentalization becomes increasingly necessary the more complex an organization is.