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CMA Foundation · Fundamentals of Business Economics and Management · Organisation Structure, Responsibility, Accountability and Delegation of Authority

Sundaram Textiles groups its activities into Production, Marketing, Finance and HR departments, each headed by a specialist manager. This basis of departmentation is called:

This is departmentation by function. Activities are grouped according to the specialised work performed, such as production, marketing, finance and HR, rather than by product line, geographic territory or type of customer served.

  1. ADepartmentation by functionCorrect
  2. BDepartmentation by territory
  3. CDepartmentation by product
  4. DDepartmentation by customer

Explanation

Grouping by the main activities of the business such as production, marketing, finance and HR is functional departmentation. Product or territory departmentation would instead group by goods made or geographic area.

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