The primary level of grouping will typically be along functional, product, area or customer lines. Determining which one will depend on how important various contextual factors are. For example, will it be more important for employees
to know about customer segment unique wants and needs or more important to know about the needs of the geographical location? eds or more important to know about the needs of the geographical location? If the company is primarily competing through cost and efficiency, then the functional method
of grouping may be appropriate. If the company is differentiating its products and services according to a particular customer segment, then the product or customer grouping may be appropriate Once a primary grouping approach has been agreed, there may then be a need to form smaller groups of employees within. This means creating secondary groups. So, for example, a company
may organise along geographic lines as primary groupings but then organise along functional lines within that. Thus, if a company set up a European and an Eastern operation, each would still need groups of employees that specialised in finance, HR, marketing and operations and so on.