Guidelines for Using Single or Multiple Classifications for an Organization

Organization classifications define the purpose of the organization, whether it's a department, a division, or a legal entity. In some enterprises, organization classifications overlap, which means that the same organization can be assigned multiple classifications.

For example, one organization within an enterprise might be both a project organization and a department. The classifications of organizations vary according to business objectives, legal structure, industry, company culture, size and type of growth. You can create organizations in Oracle Fusion with one or more classifications to reflect your enterprise structure.

Defining an Organization with One Classification

Define each organization in your enterprise as a separate organization with a single classification to reflect your enterprise structure and provide flexibility for expansion. The advantage of setting up separate organizations is the ability to add further organizations to expand the enterprise easily. For example, if your enterprise acquires another company which has a different line of business in a country in which you employ people, you can create a division, a legal entity, and additional departments. Classify the new legal entity as a legal employer and payroll statutory unit for the company's payroll tax and social insurance.

Defining an Organization with Multiple Classifications

Define an organization with multiple classifications if the organization has multiple purposes. For example, use an organization within the sales applications as a department that employs salespeople and classify it as a department and a sales organization. Or, if your enterprise operates and employs people in multiple business verticals, create a division for each such business using the Manage Divisions task. Then use the Manage Departments task to classify the division as a department.