Department definition
/What is a Department?
A department is a separate functional area within an entity that has its own organizational structure . A department typically has its own manager and operating budget. Departments may be classified as cost centers , revenue centers , or investment centers . Examples of departments are the accounting department, production department, and sales department.
Advantages of Departments
Departments tend to result in higher levels of process efficiency , because they are staffed with specialists that have a solid understanding of how those processes are supposed to function.
Disadvantages of Departments
There are a few disadvantages to the use of departments, which are as follows:
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Minimal inter-departmental interactions . The existence of a departmental structure tends to reduce the amount of interaction among the employees of different departments. This can result in sub-optimal solutions that are designed to benefit individual departments, rather than the organization as a whole.
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Extra expenses . Department managers may acquire extra staff to deal with administrative functions that could be conducted more cheaply at a corporate level. For example, a sales department might run its own sales management software on a local server, when a better approach would be to use the sales management function within a company-wide ERP system.
