DEPARTMENTATION

A department is a distinct area or a branch of the organisation which handles tasks of similar
nature.

The process of grouping of activities into units for the purpose of administration is called
departmentation.

Purpose of departmentation

1. Group the individuals with common background and shared characteristics

2. Define relationships of positions within an organisation
3. Establish formal lines of authority and fix clear responsibility
4. Provide job specialisation to the members
5. Increase economies of scale (cost reduction through enhanced production)

Types of Departmentation

• Departmentation by Function
• Departmentation by Product
• Departmentation by Geographical Regions
• Departmentation by Customer Group
• Matrix Organization
• Strategic Business Units
• Virtual Organization
• The Boundary less Organization

Departmentation of the coca cola company

The organizational structure of the Coca Cola is based on the geographical

departmentalization that means that there are several units that operate in particular
geographical areas and are responsible for the promoting of Coca Cola products on the local
level. The biggest advantages are the opportunity to react quickly to the market challenges, to
decrease costs due to unique organizational resources allocation closer to the local customers .
Organization chart

Why do you think the company selected the type of departmentation it did?

It is necessary to underline that the organizational design of the Coca Cola Company
allows divisional managers to make decisions on the local level and meet the arising local
problems more efficiently. Functions that are especially decentralized are marketing, research
and developments or innovations. However, it is necessary to point out that some strategic
decisions concerning finance are often taken in the head office and communicated to the local
divisions. Multidivisional organizational structure allows Coca Cola to decentralize a decision-
making process and thus decisions taken at the local levels assure that the Company will react
quickly to the changing market demands. The representatives of the highest management level
of the Head Office can more precisely focus on the long-term planning and strategy
development.
 I would like to say that Departmentation by Geographical Regions is better for a
company like coca cola.These types of companies are aiming the distribution of their products
all over the world.If the company is centralised in a particular country , and using the same
marketing strategies for other countries . It will not help them to get a good position in the
market. The taste,culture,climate and the things like these are different for every
country.According to these changes evry company have to make changes in their products,
marketing strategies etc. Departmentation by geographical regions provides decentrelization
and the changes required will noted by the local level and transfered to the higher level of the
company. Hence its one of the best way to stay long in the world market.