Product departmentalization

Definition

Product departmentalization is an organizational structure method where a company's divisions are organized around specific products or product lines. Each division typically has its own management and functional departments, such as marketing and production, focused on the division's specific product line.

Related terms

Functional Departmentalization:

An organizational structure where a company is divided into departments based on function areas such as marketing, finance, and production.

Matrix Organization: A flexible organizational structure that combines two or more types of departmentalization, often functional and product, to leverage the benefits of both.

Divisional Structure:

An organizational framework that groups together all functions required to produce a specific product or service type, facilitating specialization but potentially leading to duplication of resources across divisions