 I am Dr. Prakash Saunke, working as Associate Professor in Walshian Institute of Technology, Department of Mechanical Engineering. While discussing industrial management series, we shall be today dealing with the chapter Principles of Organizing Three. First time we are already seen the organizing principles of organizing and certain principles that we have studied, division of labour, span of management, departmentation. Now continuing our, I mean discussion further, today we shall discuss again departmentation. So students will be at the end of the session, students will be able to describe patterns of departmentation by product, by customer, etc. and we will discuss merits and demerits of the same. Now first let us consider departmentation by product. Now grouping of activities on the basis of products or product lines is done basically rather than functions. For example, if a company has large scale and operating in different lines. One is cement line, one is automobile line, one is electrical line. Say then say normally according to product and product line say units are set up different. So this is going to departmentation by product. Now figure one shows the organization chart, organization structure based on this kind of cement departmentation. So here you can see, so this is say board of directors. So basically general managers are there and under them again you will find manager product A. So for product A there will be again separate cement units. Manager product B, product or product line say like this production finance, manager C again say third product like that so there can be different products and product lines. Say one may be for example say cement line, one may be say electrical line, automobile line like that or some in automobile there may be again say passenger vehicles here then commercial vehicles here, heavy vehicles here like that you can have separate product division, separate product division. So this is the chart showing the product departmentation. Now the certain merits and demerits of each of them in the merits we can see that focus on the products or product lines. On a particular product and product line there is focus of that entire department. So naturally say that research and development catering to needs of the customer, I mean adding features in the product, removing the drawbacks in the product so all that is focused. So that is the first advantage. Second advantage is that so we are using specialized facilities for that product manufacturing. So it has all the advantages of specialized facilities, specialized machines, specialized skills, specialized knowledge that is required etc. So naturally each specialization will lead to increase in efficiency I mean cost, rise in quality like that. So all this will be I mean cost control so all these are the naturally advantages. Then enable diversity of the product models and service so that will arise in length and depth of product line. So naturally when we are concentrating on one product say then naturally we shall be thinking of say developing different product models catering to different needs of the customer. So that will increase the depth of the product line and adding the features and several models so that will say increase the some in length say adding different products in the same line. So that is the advantage of it say that way say within the same product line so there will be the diversity that will be achieved so that will bring balance. So it will improve functional coordination because all are leading to I mean same product or product line then the responsibility of profit at that particular division. So for this product what is the profitability that can be calculated separately by accounting and so that becomes easy. Then it enables again development of general managers because for each product or product line we require separate general manager and again functional manager sub functional manager so I mean under him. Demerits it requires again more general managers so which are not easily available effective managers I mean economies of scale so they are affected because for each department there will be separate purchasing, separate finance, separate human resources department naturally so that happens. See for certain services like purchase, maintenance etc so that effect is more. Control more difficult for top management because each same product manager will have his own demands and all budgets and all these things so say naturally say for achieving the coordination and balance and say of the resources and all these things say top management skills say are naturally more skills are required. And generally more initial set up cost again that is same just for just a territory. So similarly for each product division we have to say I mean set up all the machineries and plant and all these things so that increase the cost. Then the one more way of I mean departmentation is departments by customer, customer groups. So grouping activities serving to particular customer class or some large customers so that is known as departments by customer. In case of certain industry whether substantial or specific differences in the customer requirements at the same time size of such segment I mean customer segment is large enough so that we can cater them separately say then this type of I mean departmentation is done. In industrial products also this pattern is frequent is I mean when we are I mean supplying to industries say then it is frequently used. Say figure too so that will show the organizational structure of a typical industrial unit. Which is using these departments by customers so this is customer departmentation say for say banking unit or finance sector say here the MD say one division particularly dealing with the ladies banking giving specialized schemes to them and like the services then real estate and mortgage loan so that is one look we know that home loans and like that so that is very peculiar for example HEDFC housing development finance corporation so that is one department for customer then corporate banking serving to only corporates agriculture area school banking like that so these are the according to customer class customer class so that is the departmentation done so this is customer departmentation again it has certain merits and demerits the merits are like this so enable focus on customer specific needs so what are the needs of those who are who need the housing loans say that there will be total focus on that these customers and say there will be again specialization say for that and say customer needs are addressed in better manner second is customer feeling proud and loyalty is ensured so we are serving to that particular class of customer or in certain cases we are living to only few customers certain department so then say the customer feel that I am given some in priority he feels proud and so there are chances that he will I mean remain more loyal say to your product or your brand then say it develops expertise in customer areas since we are working for the same kind of customer so all the same in employees working in that particular department said they will become expert and that what is of specialization will be achieved simultaneously there are certain demerits difficult to coordinate operations because each department say they will try to pull in their own ways then request expert staff managers in particular fit say for agriculture banking for example agriculture so we need knowledgeable persons in that say like that for each customer the customer groups may not always be clearly defined or demarcated demarc so for all the products so this is not possible say if we are selling for example cars general so it's not able to differentiate say according to customers like that so for particular I mean certain products it is possible for certain process not then organization becomes rigid those who are serving so because it is the disadvantage of too much specialization again the same thing happens cost may be more so that naturally happens and sometimes customer may be over demanding because customer is given more prominence so he wants his own ways his more demands and more needs like that so that may happen so there are certain merits and demerits then there is a matrix organization it is a grid or matrix type of departmentation it combines functional and project or product type of patterns of departments in the same organization structure so figure will illustrate this this form is common in engineering and research and development departments and in certain seven product marketing organization etc let us see the organization structure so here so this is the organization for publisher here we will find that that editorial semi-manager production manager design at the top level and again product wise say book team a manager book team be manager so some may be publishing in engineering some may be publishing in management area some in say some history like that so for each semi category we will have separate team and this editorial and this product team so they will be combined together again say this so they will be looking for their i mean books say for editing for production i mean that printing binding for the designing so here say for each of this say you will find that everybody will be semi catering so that happens so this is known as matrix organization references we have taken the responses by book of herald and verich i stop here thanks