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CSEET · Business Laws and Management · Functions of Management

Sundaram Textiles Ltd. has separate departments for Cotton Fabrics, Silk Fabrics and Synthetic Fabrics, each headed by a manager responsible for its own production and sales. This basis of departmentation is:

This is departmentation by product, because the firm creates separate departments for each product line, namely cotton, silk and synthetic fabrics, each manager handling that line's production and sales. Functional departmentation would group activities like production or finance, not product lines.

  1. ADepartmentation by function
  2. BDepartmentation by territory
  3. CDepartmentation by productCorrect
  4. DDepartmentation by customer

Explanation

Departments are formed around each type of product line, with the manager responsible for that product's activities. This is product departmentation. Functional departmentation would instead create production, sales and finance departments.

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