When an organization is divided into departments based on specific activities like marketing or finance, this is called what type of departmentation?

When an organization structures its departments based on specific activities such as marketing, finance, human resources, or production, this is known as functional departmentation. This approach organizes employees who have similar skills or who work on similar tasks into groups, enabling specialization and an effective division of labor.

Functional departmentation benefits an organization by creating clear reporting lines, allowing for focused expertise in each department, and improving efficiency. Employees within each function can develop deep knowledge and competencies, which can contribute to enhanced performance and innovation within their respective areas.

In contrast, geographic departmentation would organize departments based on location, product/brand departmentation would focus on specific products or brands, and hybrid departmentation would combine multiple methods. Each of these alternatives serves different strategic purposes and may be better suited for different types of organizations or business objectives.