Centralization refers to withholding of delegating authority for decision-making. Decentralization means the allocation of some decision-making power down the line to subordinate managers. Decentralization is a fundamental aspect of delegations: to the extent that authority is not delegated, it is centralized. Absolute centralization in one person is conceivable.
Departmentalization refers to the formal structure of the organization. Departmentalization is the efficient and effective grouping of jobs into meaningful work units to coordinate numerous jobs — all for the speedy accomplishment of the organization’s objectives.
Functional departmentalization groups together jobs involving the same or similar activities as it allows the organization to staff all important positions with functional experts and facilitates coordination and integration.
Management is concerned with high levels of productivity and for that management must maintain a perfect balance of effectiveness and efficiency.
Customer departmentalization is where the organization structure is designed to accommodate specific customers or customer groups’ needs and specifications.
Departmentalization by Territory is the division of organization according to geographic regions as it groups jobs on the basis of territory or geography.
Departmentalization by the process is logical when the machinery or equipment used requires special skill for operating, or is of a large capacity which eliminates organizational dividing, or has technical facilities which strongly suggest a concentrated location.
Matrix departmentalization is a combination of functional departmentalization and task force departmentalization for improved harmonization of multiple components. The matrix arrangement requires extensive communication, and it should meet internal company needs.
Organizational structure’s six elements are the 6 building blocks that managers must use in developing and structure organizational hierarchy. Elements of organizational structure are; design jobs, departmentalization, establish reporting relationships, distribute authority, coordinating activities, and differentiating among positions.