Question: Baobab Enterprises is a mid - sized company based in Johannesburg, South Africa. It specialises in the production and sale of eco - friendly home
Baobab Enterprises is a midsized company based in Johannesburg, South Africa. It specialises
in the production and sale of ecofriendly home appliances tailored to the African market. As
Baobab Enterprises has grown over the years, the need to organise its operations efficiently has
become more pressing. The company currently operates using a functional organisational
structure with departments such as marketing, finance, production, and sales.
However, the management team is considering a shift to a product departmentalisation structure
to better cater to the unique needs of each product line and regional market. Baobab Enterprises
produces three main lines of products: kitchen appliances, cleaning devices, and solarpowered
lighting solutions. Under a product departmentalisation structure, each product line would have its
own dedicated team responsible for all functions eg marketing, production, sales related to that
product line. The management team believes this shift may allow for greater specialisation and
responsiveness to customer needs. However, they are also concerned about potential challenges
such as duplication of resources, increased operational costs, and potential difficulty in
coordinating activities across different product lines. To aid in their decisionmaking, the
management team has asked for a comprehensive analysis of the potential benefits and
drawbacks of adopting a product departmentalisation structure in the South African market
context.
Given the potential advantages and disadvantages of product departmentalisation,
how would you recommend Baobab Enterprises organise its operations to maintain
efficiency while addressing the specific needs of each product line?
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