Department is a unit that is specialized in a particular aspect.

 

Departmentalization is the dividing of organizational functions (design, marketing, etc.) into separate units.



The traditional way to departmentalize organizations is by function. Functional structure is the grouping of workers into departments based on similar skills, expertise, or resource use. A company might have, for example, a production department, a transportation department, and a finance department.


Departmentalization by function enables employees to specialize and work together efficiently. It may also save costs.