Departmentation methods
- 2. What It Means? It is a process of dividing small units of organizational activities. Departmentation may be called division sections branch etc. it helps to provide the specialization, develops the skill and knowledge of manpower and the efficiency of manpower of an enterprise will be increased. It specifies the area of the activities that facilitate the managerial task.
- 3. Definition Of Departmentation According to Koontz and O’Donnell, “Departmentation is a process of dividing the large monolithic functional organization into smaller and flexible administrative units.”
- 4. Methods Of Departmentation 1)Departmentation by Function:2)Departmentation by location or the place :3)Departmentation by processes :4)Departmentation by products:5)Departmentation by Customer:-
- 5. Departmentation by Function This is the simplest and most prevalent basis for departmentation. Under this all the functions of similar nature are divided in different units which are called departments.
- 7. EXAMPLE The functions of manufacturing concern can be divided into production department,marketing department, financial department and personnel department. Again sub departments can be established in each department
- 8. MERITS: 1. SIMPLER AND FAMILIAR 2. ECONOMY 3. OVERLAPPING AND DUPLICATION DEMERITS: 1. DIFFICULT TO MEASURE 2. AFFECT THE PERFORMANCE
- 9. Departmentation by location or the place Departmentation by location or place means, "Grouping of activities by area or territory is common in enterprises operating over wide geographic areas.” Organizations which are involved in banking , insurance , transportation.
- 10. Departmentation by location or the place MARKETING MANAGER EASTERN ZONE NORTHERN ZONE CENTRAL ZONE TAMILNADU SOUTHERN ZONE ANDHRA PRADESH WESTERN ZONE KARNATAKA KERELA
- 11. EXAMPLE India could be divided into north , south , east , west , central zones. Further North Zone can be divided into Chandigarh, New Delhi, Ludhiana.
- 12. MERITS: 1. REGION WISE INTEGRATION 2. ADOPT AND RESPOND 3. LOCAL LAWS AND CUSTOMS DEMERITS: 1. REDUCE CONTROL OF THE TOP MANAGEMENT 2. UNIFORM POLICIES 3. COMPITITION
- 13. Departmentation by processes In this process involved in production or various types of equipment's used are taken as basis of departmentation.The basic aim to do process departmentation is to achieve economic benefit.
- 15. EXAMPLE Process departmentation in case of textile organization can be by dividing the production into spinning,dyeing, weaving, finishing departments.
- 16. MERITS : 1. ECONOMY OF OPERATION 2. EFFICIENCY 3. TRAINING AND DEVELOPMENT DEMERITS : 1. DIFFICULT TO MEASURE THE PERFORMANCE 2. PROBLEM OF CO-ORDINATION 3. AFFECTS THE OPERATION
- 17. Departmentation by products Product departmentation involves the grouping together of all the activities necessary to manufacture a product or product line.
- 19. EXAMPLE In an automobile organization the departmentation could be car division, truck division, bus division.
- 20. MERITS: 1. PROPER ATTENTION 2. IDENTIFICATION AND DROPING 3. DECENTRALISATION DEMERITS: 1. COST OF OPERATION 2. PROBLEMS OF CONTROL 3. CENTRALISE THE AUTHORITY
- 21. Departmentation by Customer Grouping of activities around marketing channels involves making an organization structure reflect the ways an organization reaches the ultimate customer.
- 23. EXAMPLE In pharmaceutical companies different customers could be doctors , hospitals , government , retail stores. Further it could be wholesale , retail , export.
- 24. MERITS: 1. UNDERSTAND THE PARTICULAR NEEDS 2. PROPER ATTENTION 3. INCREASE GOOD WILL DEMERITS: 1. CO-ORDINATION 2. UNDERUTILISATION 3. COST OF OPERATION
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