Departmentalization

Is the grouping of organisational units by specific criterios, for example:

Geographical

Groups OU's by their geographical distribution.

Goods/Services

Groups OU's by Goods and Services they provide.

Projects/Matrix

Groups OU's by projects.

Clients

Groups OU by the clients they work for.

The most used type of departmentalisation is:

Functional

Functional departmentalization is an organizational structure where business leaders divide teams according to the professionals' areas of specialization. This means that if a company is creating a new product, there may be one team of marketing specialists, another team of software designers and a team of data scientists. These different groups work within their teams to complete tasks related to their area of focus and expertise.

Advantages:

The most widespread and proven.
Encourages specialisation.

Disadvantages:

The objectives of the departments prevail over those of the company as a whole.
Requires greater coordination.
Not very suitable for companies with a wide territorial spread or very diversified.

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