The president of Digital Equipment Corporation discovered that his company was having a problem with counterproductive product groups that were working selfishly rather than cooperating with one another. To solve the problem, he combined the company's twelve U.S. product groups into three regional management centers. This solution is referred to as departmentalization by

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The president reorganized the product groups based on geographical regions, which is an example of departmentalization by location. This approach groups jobs based on the geographic location where services are performed or products are produced.

The President of Digital Equipment Corporation Discovered That His Company