Departmentation is there in all level of organisation. It avoid confusion. It is a very easy concept. This slide would make your understanding much more clear and better. hope you have clear understanding after reading this. Happy kearning.

1. TYPES/ METHODS OF
DEPARTMENTATION

2. Departmentation by functions
Grouping of activities according to the
functions of an enterprise such as production,
sales & financing.

3. Departmentation by territory or geography
Grouping of activities by area or territory is
common in enterprises operating over wide
geographic areas.
Eg. 25% Mcdonald’s franchise managed by area
supervisor.

4. President
Marketing Hr purchasing
Western
region
Souther
n region
Central
region
Eastern
region
Engineering Production
Finance
sales
finance

5. Departmentation by Customer
Grouping of activities based upon the interest of
customers.

6. President

7. Advantage
Encourage focus on
customer needs.
Develop expertise in
customer needs.
customer may get
better service to
increase goodwill
Disadvantage
Duplicate activity
Customer group may
not always clearly
defined
Difficult to coordinate

8. Departmentation by Process
Grouping of production activity when it is
carried in many place.
Advantage
No interpretation in work
Economical in operation
Specialisation of labour
Costlier machines are used effectively

9. Disadvantage
 Increases cost of operation
Specialist are essential for each process

10. Departmentation by time
Grouping of business activity on the basis of the
time of the performance.
Eg. Shift

11. Departmentation by
number
Similar type of duties are performed by small
group.
Army- squads, battalion, brigades,
regiments

12. Departmentation by
marketing channel
The channel of distribution is selected by the
business unit on the basis of goods &
marketability of product.