have line authority overall executives who report to him and over sales and thus has the right and
responsibility to develop sales policy and methods. The functional specialists report to the chief
executive having no line authority but merely functional authority.
13.8 SUMMARY
In this lesson organisational design, factors of organisational design, organisational processes, and
organisational structure, is explained in detail. The classical design has been in existence since the
earliest management days. Moreover, most enterprises are involved in producing a product or a
service for the benefit of others. Therefore, departmentation involves grouping of people or activities
with similar characteristics in to a single department or unit. Thus, the selection of the media of
departmentation will be determined on the basis of the extent to which it is likely to achieve the
objective. As such departmentation can be classified into seven types. viz. (1) by function, 2. by
product, 3. by territory, 4. by customer, 5. by process, 6. by task force and 7. by appropriate combination
of these types.
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