Understanding What Product Organization in Business Means

What is product organization in business? How does it work? Here’s everything you need to know about this organizational structure.

What Product Organization in Business Means

A product organization is a business structure that assigns its employees to specific products. With this organizational structure, employees are often handling the same products throughout the year.

This could mean that they are dedicated to anyone product or specializing in one product. They are also experts in one product or aspect of it.

It typically has two types of departments:

1. Product divisions
2. Product groups

The former focuses on one product or a group of related products. The latter typically focuses on all the non-product activities that support the product divisions.

How Product Organization Works in Business

Product organization is also a way to organize the employees in the business to maximize their contribution to the company.

It works by assigning each employee to a specific product or group of products throughout the year so that they only focus on one product or a group of related products.

This could also mean that they are dedicated to anyone product or specializing in one product. They are also experts in one product or aspect of it.

Which department they are handling to may vary, but they are all dedicated to that specific product or group of products.

Key Features of Product Organization in Business 

Companies also often use this type of organizational structure. And that is because it can help improve product quality, increase sales and deliver higher profitability.

Improves Product Quality 

This gives them a deeper understanding of the product and its needs. 

With this, they can provide a higher level of service to the customers and ensure that the product meets their needs.

Increases Sales 

Employees can gain a better understanding of the needs of the customer and deliver solutions that meet those needs. 

They have in-depth knowledge on how to market those products as well as how to deliver those solutions to the customers.

Delivers Higher Profitability

They have a better understanding of how to best meet the customer’s needs and deliver solutions that will further maximize their profit. 

Furthermore, they will be able to prioritize their time and efforts on those specific aspects of the product that most contribute to its profitability. 

This will maximize their contribution towards the company’s profitability as well as their own.

How It Differs From Other Organizational Structures 

Product organization differs from most other organizational structures. For one, it focuses on one or more products and assigns employees with specialization in those specific products.

It differs from a functional organizational structure, which assigns employees to specific departments with a focus on a specific function or area of service.

This structure also differs from an activity-based structure in that it focuses on the product instead of the activities that support it.

It also differs from a process-based organization in that it focuses on the actual product instead of the procedure that they use to manufacture or deliver it.

Conclusion

Product organization is a way to organize the employees in the business to maximize their contribution to the company.

It works by assigning each employee to a specific product or group of products throughout the year so that they are focused on one product or a group of related products.

This could mean that they are dedicated to anyone product or specializing in one product. They are specialized in one product or aspect of it.