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Management Concepts & Organisational Behaviour - Organisation Structure And Design

Territorial Depart mentation - Organisation Structure And Design

   Posted On :  17.05.2018 11:39 pm
Territorial Depart mentation - Organisation Structure And Design

The process of creating departments along the geographical areas that the enterprise serves is termed territorial depart mentation.

Territorial Depart mentation
 
 
The process of creating departments along the geographical areas that the enterprise serves is termed territorial depart mentation. This method is adopted when an organization operates in different geographical areas, each with distinct needs and dynamics. Territorial Depart mentation makes it easier for the organization to cope with variations in laws, local customs and customer needs. Public utilities like transport companies, insurance companies, etc., adopt territorial depart mentation. Similarly, a large scale organization operating both in domestic and international markets may have separate departments for both the markets. Again, different departments or divisions may be created for different regions of the world. Many multinational companies organize their global activities with regional headquarters in different regions of the world.


Advantages:

 

--  Territorial departmentation makes it possible to concentrate on markets and marketing channels in different geographical areas;

-- Develops opportunities for more efficient marketing activities because of better face-to-face communication with local stakeholders; and

--   Makes possible effective utilization of locally available resources besides being able to cater to the region specific variations in terms of preferences and sentiments of the people.

 

Disadvantages:

 

 

--   In this type of depart mentation, there are problems in training people to think in terms of markets rather than products;

--   Requires more persons with general managements abilities; and

-- Increases problem of top management control because of the distance between the corporate headquarters and the regional officers.


The three patterns of depart mentation discussed above – product, customer and territorial depart mentation broadly characterize the divisional structure. All the three patterns have advantages and disadvantages. The choice of any of these structures, therefore, would be based on which of the factors management judges to be more important and critical in the light of the strategies and objectives
Tags : Management Concepts & Organisational Behaviour - Organisation Structure And Design
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