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Explain the advantages of Product Departmentation.

Explain the advantages of Product Departmentation.

Answers

Kavungya
- Product departmentation places emphasis on the basic products, the success of which is critical to the survival of the organization;
- Since all revenues and costs are assigned to a particular product, cost centers can be established, high profit areas can be encourage and unprofitable product lines can be dropped. Thus, responsibility for cost reduction and profits can be established at the division level;
- Proper coordination of all functional areas can be achieved as all the functional managers work as a team under close supervision of the product manager. Since the department or division is multifunctional it often operates like a complete company.
- Enables quick response to changes in environment as compared wit functionally organized firm;
- Provides managers a training ground in general management which is useful in overcoming narrowness of interest, and
- Expansion and diversification of activities is made easy by create new departments for the new products that are added to the existing ones.
Kavungya answered the question on March 26, 2019 at 12:43

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