Organizing: Definition:

Determining what tasks are to be done, who is to do them, how the tasks are to be grouped, who reports to whom and where decisions are to be made.

Organizing in management refers to the relationship between people, work, and resources used to achieve the common objectives.

Organizational Structure:

Organizations are a group of people, with ideas and resources, working toward common goals. The purpose of the organizing function is to make the best use of the organization’s resources to achieve organizational goals.

Organization Structure is the format decision-making framework by which job tasks are divided, grouped and coordinated. Formalization is an important aspect of the structure. It is the extent to which the units of the organization are explicitly defined and its policies, procedures, and goals are clearly stated. It is official organizational structure conceived and built by top management.


Departmentalization is the basis on which work or individuals are grouped into manageable units.

The process of grouping the activities is commonly known as Departmentalization

Departmentalization divides a large and complex organization into smaller and more flexible administrative units.

Importance of Departmentalization

  • Functional specialization
  • Role definition of each individual
  • Facilitates control, coordination, and communication
  • Necessary platform to build loyalty

Departmentalization: Types

  • Departmentalization by function organizes by the functions to be performed. The function reflects the nature of the business. The advantages of this type of grouping are obtaining efficiencies from consolidating similar specialties and people with common skills, knowledge, and orientations together in common units.
  • Departmentalization by product assembles all the functions needed to make and market a particular product are placed under one executive. For instance, major department stores are structured around product groups such as home accessories, appliances, women’s clothing, men’s clothing, and children’s clothing
  • Departmentalization by geographical regions groups jobs on the basis of territory or geography. For example, Merck, a major pharmaceutical company, has its domestic sales departmentalized by regions such as Northeast, Southeast, Midwest, Southwest, & Northwest.