Departmentalization at Art & Craft Depot (Scenario)
John is president of a chain of stores called Art & Craft Depot. He is aware that the structure of his organization must change in order to compete more effectively in today's global marketplace. However, he is not sure which structure would work best for his company. His company is currently organized under the following departments: accounting, human resources, sales, purchasing, and distribution. However, there are other choices available. He has considered reorganizing around their primary product groups: silk flowers, art supplies, craft supplies, pottery, and fabric. However, equally important are the different types of clients they serve, including homemakers, artists, interior decorators, industrial display contractors, and art schools. The business is growing, and they now have stores in six provinces across Canada. Furthermore, his customers seldom shop for just one type of item. For example, a customer who buys flowers will frequently purchase a vase and other supplies that are required to create a full floral arrangement. This means that individual customers often shop in several merchandise areas of the store.
-If John organizes the new structure based on the provinces served across Canada they would be using ________ departmentalization.
A)process
B)functional
C)geographical
D)customer

Question

Quizplus · Accepted Answer

Geographical departmentalization would be appropriate because the company has stores in six provinces across Canada. This structure would enable the company to coordinate activities and adapt to local market conditions within each province.

In addition, customer departmentalization would be appropriate because the company serves different types of clients, such as homemakers, artists, and interior decorators. This structure would enable the company to better understand the unique needs and preferences of each customer group and tailor its products and services accordingly.

Reorganizing around primary product groups would not be the best choice because customers frequently shop for multiple types of products, as mentioned in the scenario. Furthermore, maintaining functional departments such as accounting, human resources, sales, purchasing, and distribution is likely necessary for overall business operations.