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Departmentation

Departmentation groups activities and people into organisational units using a chosen basis, such as function, product, geography or customer group. The choice affects specialist expertise, coordination, accountability and responsiveness. An organisation may combine several bases, and a matrix structure creates intersecting lines of responsibility. The appropriate grouping depends on the organisation’s work, strategy, size and environment.

Worked example

A bank creates separate business-customer and personal-customer divisions, each with services tailored to its customers. Central finance and technology teams continue to provide shared support, combining customer grouping with functional expertise.

Common mistake

Departments are not always based on functions. Also distinguish a product range displayed in separate retail sections from a complete customer-based management structure.

Where it appears in your exams

QualificationExamRelationshipPeriod
ACCA BT Direct September 2026–June 2027
FIA FBT Direct September 2026–June 2027