Employee knowledge and skills: Employees are grouped by what they know; for example, pharmaceutical organizations have departments like oncology and genetics.
Business function: Employees are grouped by business function; for example, many organizations have departments of human resources, marketing, and research and development.
Work process: Employees are grouped based on the activities they do; for example, a retailer may have different retail store and online departments reflecting two different sales processes.
Output: Employees are grouped based on the products or services they work on; for example, Colgate-Palmolive has two business divisions: One division includes oral, personal, and home care products and the other focuses on pet nutrition.
Client: Employees are grouped based on the type of clients they serve; for example, Dell Computer has different departments supporting home, medium and small business, the public sector, and large business customers.
Location: Employees are grouped based on the geographical areas they serve; for example, many retailers including Lowe's Home Improvement divide employees by regions.