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OSHA

Departmentalization

President

Vice-President Vice-President Vice-President
Production Finance and Accounting Marketing Functional

Book Book Eastern Western
Process
Printing Binding Regional Regional Geographic
Manager Manager
Education Corporate
Sales Sales Customer
Manager Manager

Software Textbooks Product

Figure 6

costly salaries and increasing employee span of control. which creates departments responsible for various steps in
Many middle managers who stayed in their current “posi- the production process (Boone and Kurtz, 2006).
tions” found that their jobs have changed to being
coaches, or team leaders, who allow their employees SEE ALSO Management: Authority and Responsibility;
greater freedom in completing their work responsibilities Organizational Behavior and Development
(Csoka, 1995, p. 3).
The chain of command is the protocol used for com- BIBLIOGRAPHY
munication within organizations. It provides a clear pic- Boone, Louis E., and Kurtz, David L. (2006). Contemporary
ture of who reports to whom. Quick decisions can be Business 2006. Mason, OH: Thomson/South-Western.
made in decentralized organizations because approval usu- Chandler, Alfred D., Jr. (1988, March/April). “Origins of the
ally has to come only from the manager one level higher Organization Chart,” Harvard Business Review, 88, 2, 156.
than the person making the decision. The chain of com- Csoka, Louis. (1995). Redefining the Middle Manager. HR
mand involves line-and-staff employees, where the staff’s Executive Review, 2(2), 3–5.
job is completing the actual work and the line functions Keeling, B. Lewis, and Kallaus, Norman F. (1996). Administra-
to oversee the staff (Figure 5). tive Office Management, 11th ed., Cincinnati, OH: South-
Western Educational Publishing.
DEPARTMENTALIZATION Litterer, Joseph A. , ed. (1980). Organizations: Structure and
Organizations can be divided into various departments, or Behavior. New York: Wiley.
units, with individuals who specialize in a given area, such Sexton, William P. (1970). Organization Structure. In William P.
as marketing, finance, sales, and so forth. Having each Sexton, ed., Organization Theories. Columbus, OH: Charles
unit perform specialized jobs is known as departmental- E. Merrill.
ization. Departmentalization is done according to five
major categories (Figure 6): (1) product, which requires Christine Jahn
each department to be responsible for the product being
manufactured; (2) geographic, which divides the organiza-
tion based on the location of stores and offices; (3) cus-
tomer, which separates departments by customer type, OSHA
such as textbook companies that cater to both grade
schools and community colleges; (4) functional, which SEE Occupational Safety and Health Administration
breaks departments into specialty areas; and (5) process, (OSHA)

572 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION