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  1. 1. Departmentation <ul><li>Departmentation by enterprise function means grouping of activities according to the functions of an enterprise, such as production , selling and financing </li></ul><ul><li>Departmentation is a means of dividing a large organization into smaller , flexible units </li></ul>Er.Sartaj Singh Bajwa
  2. 2. Advantages <ul><li>Increase the efficiency of the organization as various activities are grouped together </li></ul><ul><li>Furnishes means of tight control at the top. </li></ul><ul><li>Simplifies training. </li></ul><ul><li>It provides for fixation of standards of performance and ensures effective control </li></ul><ul><li>Creates opportunities for the departmental heads to take initiative </li></ul>Er.Sartaj Singh Bajwa
  3. 3. Disadvantages <ul><li>Reduces coordination between functions as the organization is divided into various parts </li></ul><ul><li>Responsibilities for profits is at top only. </li></ul><ul><li>Slow adaptation to change in environment. </li></ul><ul><li>It increases the levels of management which is expensive and thus increases the gap between the top management and the workers </li></ul><ul><li>Departmentation creates difficulties of communication among the various departments of the organization </li></ul>Er.Sartaj Singh Bajwa
  4. 4. Factors affecting Departmentation <ul><li>To get the benefits of specialization </li></ul><ul><li>Control should be effective so as to ensure clear authority and responsibility </li></ul><ul><li>Coordination should be taken into consideration </li></ul><ul><li>Key activities need to be separated </li></ul><ul><li>Expenses involved in creating separate departments </li></ul>Er.Sartaj Singh Bajwa
  5. 5. Basis Of Departmentation <ul><li>Functional Departmentation </li></ul><ul><li>Product wise Departmentation </li></ul><ul><li>Territorial or Geographical Departmentation </li></ul><ul><li>Process wise Departmentation </li></ul><ul><li>Customer wise Departmentation </li></ul><ul><li>Time wise Departmentation </li></ul>Er.Sartaj Singh Bajwa
  6. 6. Functional Departmentation <ul><li>Grouping of common or homogeneous activities to form an organization unit is known as functional departmentation </li></ul><ul><li>Further functions in an organization are divided in two categories basic and secondary functions </li></ul><ul><li>Basic functions are those which are necessary for the smooth running of the business like production ,marketing , finance </li></ul><ul><li>When span of management is too large then further departments are created within the main departments they take care of secondary functions </li></ul><ul><li>In this case like the basic function is marketing but it may further be divided into advertisement , sales , market research </li></ul>Er.Sartaj Singh Bajwa
  7. 7. Product wise Departmentation <ul><li>Product departmentation involves the grouping together of all the activities necessary to manufacture a product or product line </li></ul><ul><li>Eg In an automobile organization the departmentation could be car division , truck division , bus division </li></ul>Er.Sartaj Singh Bajwa
  8. 8. DEPARTMENTATION BY TERRITORY OR GEOGRAPHY <ul><li>Departmentation by territory or geography means </li></ul><ul><li>“ Grouping of activities by area or territory is common in enterprises operating over wide geographic areas”. </li></ul><ul><li>Organizations which are involved in banking , insurance , transportation </li></ul><ul><li>Eg India could be divided into north , south , east , west , central zones </li></ul><ul><li>Further North zone can be divided into Chandigarh , new Delhi , Jalandhar , Ajmer divisions </li></ul>Er.Sartaj Singh Bajwa
  9. 9. Process Departmentation <ul><li>In this processes involved in production or various type of equipments used are taken as basis of departmentation </li></ul><ul><li>The basic aim to do process departmentation is to achieve economic benefit </li></ul><ul><li>Eg process departmentation in case of textile organization can be by dividing the production into spinning , dyeing , weaving , finishing departments </li></ul>Er.Sartaj Singh Bajwa
  10. 10. Customer wise Departmentation <ul><li>Grouping of activities around marketing channels involves making an organization structure reflect the ways an organization reaches the ultimate customer </li></ul><ul><li>Advantage of this type is that it focuses on customer who are the ultimate suppliers of money to the organization </li></ul><ul><li>Eg in pharmaceutical companies different customers could be doctors , hospitals , government , retail stores </li></ul><ul><li>Further it could be wholesale , retail , export </li></ul>Er.Sartaj Singh Bajwa
  11. 11. Time wise Departmentation <ul><li>In some organizations where work is performed through day and night , the work is divided into shifts </li></ul><ul><li>Thus when an organization may operates on three shifts, three different departments may exist </li></ul>Er.Sartaj Singh Bajwa
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