2. MEANING
Departmentation means the process
by which similar activities of the
business are grouped into units for the
purpose of facilitating smooth
administration at all levels.
It is the process of grouping activities
of similar nature into departments
3. DEFINITION
According to Koontz and O’Donnell
“Departmentation is a process of dividing
the large monolithic functional organization
into small an flexible administrative units”
4. NEED AND IMPORTANCE
1. Specialization
2. Fixation of Responsibility
3. Autonomy
4. Smooth Functioning
5. Performance Appraisal
6. Development of Managers
5. Bases Of Departmentation
I. Functional Departmentation
II. Product Departmentation
III. Territorial/Geographical Departmentation
IV. Process Departmentation
V. Customer Departmentation
VI. Time Departmentation
VII. Alpha-Numerical Departmentation
6. FUNCTIONAL DEPARTMENTATION
Every manufacturing unit, has to
perform certain basic functions such as
Production, Marketing, Finance and
Personnel.
Each of these are grouped into
separate departments such as
Production department, Marketing
Department, Finance Department and
Personnel Department. This is known
as Departmentation by Functions.
7.
8. Product departmentation
Grouping of all activities necessary to
manufacture a product or product line
is called Product Deapartmentation
Head of each department is known as
Product Manager
9.
10. Territorial / Geographical
Departmentation
Along with the increase in the
company’s volume of business it may
find it necessary to establish regional
factories and branch offices to meet the
increasing demand for its products or
services.
Eg. Banking , insurance ,
transportation companies
12. Process Departmentation
In process departmentation, process
involved in production or various type
of equipments used are taken as basis
for departmentation
Various processes can be used as the
base of grouping of activities
13.
14. Customer Departmentation
In customer departmentation ,
activities are grouped according to the
types of customers
Eg. A large Readymade Garment Store
may have separate department each
for women , men & children
16. Time Departmentation
In some organisations, where work is
performed throughout the Day & Night, the
work can be divided into Shifts
Eg. Call Centre, Medicals Stores etc
Supervisor
Day Shift Evening Shift Night Shift
17. Alpha - numerical
Departmentation
Alpha-Numerical Departmentation are
created on the basis of number of people
irrespective of the fact what they do, where
they do & how they do
Eg. Military Organisation
18. Merits of Deapartmentation
I. Clear Division of Activities
II. Increase in Efficiency
III. Proper Control
IV. Development of Capable Members
V. Knowledge of Departmental Costs
19. Demerits of departmentation
I. Decentarlization
II. Difficulty in Selection of Managers
III. Difficulty in Managerial Training
IV. Uneconomical System
V. Not Suitable for Small Enterprises
