Departmentation

Departmentation
Introduction
What is Departmentation?
 Process of dividing activities into units &

subunits
 Not only confined to term departments but it

includes divisions, sections & job also
Common Bases For Departmentation
 Knowledge & skills-People are grouped by

what they know
 Work process-Workers are grouped based
on the process or activity used by the worker
 Business Function-Grouping by the basic
function in organization
 Time- When work is done, for example: shifts
in a factory or hotel or hospital
Contd…
 Output-Grouping based on the products or

services that the employee works on
 Client-Grouping based on the type of clients
their work is ultimately sold to
 Places-Groups are based on the
geographical areas that they serve
Need for Departmentation
 Specialization- Departmentation should

reflect the specialization in performing work
 Coordination- Best results achieved when
activities are performed in coordination
 Control-Process of analyzing whether
intended results are being achieved.
Contd…
 Economy-Balance should be maintained b/w

cost of creating a department & its
contributions
 Local conditions-More important for
organizations operated in different
geographical areas
 Human considerations- Human factor plays
an important role
Major Benefits of Departmentations
 Specialisation
 Administrative control
 Fixations of responsibilities
 Freedom or autonomy
 Development of managers
Disadvantages
 De-emphasis of overall company’s objectives

 Reduces coordination b/w functions
 Responsibility for profits is at the top only
 Slow adaptation to change in environment
 Limits development of general managers
 Overspecializes & narrow viewpoint of key
personnel
Ideal Principles of Departmentation
 Principle of attainment of enterprise

objectives
 Principle of comprehensive department
 Principle of inter-departmental co-operation
 Principle of promotion of specialization
 Principle of cost benefit analysis
Contd…
 Principle of top-management control
 Principle of flexibility
 Principle of better utilization of resources
 Principle of human consideration
 Principle of special attention to key-results
areas
 Principle of autonomous feeling of
departmental heads
Types of Departmentation
Functional Departmentation:- Grouping of

departments is done on the basis of functions
such as production, finance, marketing sales
purchase & personnel
 Further sub division of functions may be
formed like marketing can be divided into
advertisement sales & after sales
Contd...
CEO
PRODUCTION FINANCE MARKETING PERSONAL
ADVERTISEMENT SALES
MARKET RESEARCH
Contd…
 Functions divided into 2 parts:-

 Basic functions- Production Marketing
finance & personnel
 Secondary functions-Further parts of basic

functions like production- production planning
, R&D, quality control & marketing handling
Advantages & Disadvantages of
Function
Advantages:
 Advantage of specialization
 Easy control over functions
 Pinpointing training needs of manager
 Very simple process of grouping activities
Disadvantages:
 Lack of responsibility for the end of result
Contd…
 It leads to increase conflicts & coordination

problem among departments
 Overspecialization or lack of general
management
Products Departmentation:- Grouping of

activities & departments formed are given
name on the basis of products manufactured
in an organization
 Applied where there is a large range of
products are manufactured
 Applied where there are several product lines
& functional departments fails
Contd…
CEO
HEAD AC
HEAD TV DIVISION HEAD COMPUTER
& REFIGRATION
Advantages & disadvantages of
Products
Advantages:
 Ensures better consumer services.
 Unprofitable products may be easily
determined
 Assist in development of all around
managerial talent
 Makes control effective
Contd…
Disadvantages:
 Expensive as duplication of service functions
occurs in various product divisions
 Customers & dealers have to deal with
different persons for complaints & information
of different products
 Territories Departmentation: Geographical

regions are adopted for main division as well
as for subdivision purposes
 Territorial departmentation are adopted when
organizations activities are physically
dispersed in different locations
 Useful where business is on international &
national level
Contd…
CEO
HEAD NORTH ZONE HEAD EAST ZONE HEAD WEST ZONE HEAD SOUTH ZONE
Territorial
Advantages:
 Cater to meet the needs of local people more
satisfactorily
 It facilitates the effective control
 Assists in development of all- round
managerial skills
Contd…
Disadvantages:
 Communication problem b/w head office &
regional office due to lack of communication
at some places
 Coordination b/w various divisions may
become difficult
 It leads to duplication of activities which may
cost higher
 Customers Departmentation: When

departments are made to cater different kind
of customers
 Widely followed in subdividing activities of
the marketing department
 Helps in supplying good in accordance with
the peculiar needs of customer
Contd…
HEAD MARKETING
HEAD WHOLSALE HEAD RETAIL HEAD EXPORT

Customer
Advantages:
 It focused on customers who are ultimate
suppliers of money
 Better service to customer having different
needs & tastes
 Development in general managerial skills
Contd…
Disadvantages:
 Sales being the exclusive field of its
applications , coordination may appear
difficult b/w sales function & other enterprise
functions
 Specialized sales staff may become idle with
the downward movement of sales to any
specified group of customers
THANK YOU
…learning never ends

the journey of
excellence continues…

Departmentation

Uploaded by

Copyright:

Available Formats

Departmentation

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Departmentation

Uploaded by

Copyright:

Available Formats

Departmentation

 Process of dividing activities into units &

 Not only confined to term departments but it

 Knowledge & skills-People are grouped by

 Output-Grouping based on the products or

 Specialization- Departmentation should

 Economy-Balance should be maintained b/w

 De-emphasis of overall company’s objectives

 Principle of attainment of enterprise

Functional Departmentation:- Grouping of

PRODUCTION FINANCE MARKETING PERSONAL

 Functions divided into 2 parts:-

 Secondary functions-Further parts of basic

 It leads to increase conflicts & coordination

Products Departmentation:- Grouping of

 Territories Departmentation: Geographical

 Customers Departmentation: When

HEAD WHOLSALE HEAD RETAIL HEAD EXPORT

…learning never ends

You might also like