The document discusses different ways to structure organizations through departmentation. It describes five common types of departmentation: by product, by function, by region/territory, by customer, and by process. Each structure has advantages like specialization and focus but also disadvantages like potential lack of coordination or duplication of roles. The document also discusses matrix structures and emerging concepts like strategic business units and virtual organizations.

1. ORGANIZATION
DEPARTMENTATION

2.  “The process of identifying & grouping the work is to be
performed ,defining & delegating responsibility &
authority & establishing relationship for the purpose of
enabling people to work most effectively together in
accomplishing objectives”
-

3. 1. Deliberate & conscious creation
 Orgenisation is a deliberately & consciously created human group.
 Orgenisation can also recombine its personnel through promotion ,demotion
& transfer
2. Purposive creation
 All the orgenisation have some objectives
 The objectives are mutually agreed upon the members of the groups.
3. Coordination of activities
 Coordination is necessary because all the members contribute to commonly
agreed goal
4. Structure
 Structure provides power centers which co-ordinate & control concerted
effort of the orgenisation & direct towards its goals.
5. Rationality
 Every orgenisation has some specified norms & standards of behaviour
 Every individuals & every member should behave according to these norms

4.  Organizational structure is the pattern of relationship
among various components or parts of the orgenisation.
 Organization structure refers to the differentiation &
integration of activities & authorities ,role & relationship
in the orgenisation

5.  Features of good organization structure.
o Clear line of authority.
o Adequate delegation of authority.
o Application of ultimate responsibility.
o Minimum managerial levels.
o Unity of direction.
o Proper emphasis on staff activities.
o Simplicity.
o Flexibility.

6.  The process of grouping the activities known as
departmentation
 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
 According koontz & O,Donnell a departmentation is process
of dividing the large functional orgenisation into small &
flexible & administrative unit.
 Choosing basis for departmentation
 Specialization
 Coordination
 Control
 Economy
 Recognition of local condition
 Adequate attention
 Human consideration

7.  Types of departmentation/ways to structure the
business
1. Departmentation by product
2. Departmentation by function
3. Departmentation by region or territory
4. Departmentation by customer
5. Departmentation by process

8.  Grouping of activities according to products or
product lines , especially in multiline, large
enterprises.

9. Product departmentation
Car Division Truck Division Bus division Long vehicle
Chief Executive
production
Marketing finance HR

10. Advantages
 Clear focus on market segment helps meet customers’ needs
 Positive competition between divisions
 Better control as each division can act as separate profit
centre
 Improve coordination of functional activities.
 Places responsibility for profit at division level.
 Places attention & effort on product line.

11.  Duplication of functions (e.g. different sales
force for each division)
 Negative effects of competition
 Lack of central control over each separate
division.
 Require more personal with general manager
abilities .
 Trend to make maintained of economical
central services difficult

12. 2.Functional departmentation
 The grouping of common & homogeneous activities to form
an organizational unit is known as functional orgenisation
 Function are two types basic function & secondary function
 basic function can be divided into sub-function
 Each department have a head with the title departmental
manager
 The functional departmentation will include both line
function as well as staff function
Production Marketing Accounts Personnel IT
Managing Director
Board of Director

13. Advantages
 Specialisation – each department focuses on its own work
 Accountability – someone is responsible for the section
 Clarity – know your and others’ roles
 Simplifies training

14.  Closed communication could lead to lack of
focus
 Departments can become resistant to change
 Reduce Coordination between function
 Gap between top and bottom

15.  .

16.  Territorial Orgenisation is especially attractive to large
scale firms or rather enterprises whose activities are
physically or geographically dispersed.
 All the activities of given area of operation are grouped
into zone ,division ,branches
 This structure is suitable for large scale orgenisation or
whose activities are physically or geographically spread.
 This structure is most often used in sales & in production

17. Eastern Zone
Kolkata
Central Zone
Kolhapur
Northern zone
Delhi
Southern zone
Chennai
Western zone
Mumbai
Head Office
Mumbai
jalandha
r
chandigarh New
delhi
ajmer
branch branch branch branch

18.  Place responsibility at lower level
 Place emphasis on local market & problem
 Take advantage of economic of local operations
 Better face to face communication with local
interest
 Improve coordination in a region
 Serve local needs better

19.  Require more person wit general manager
abilities .
 increases problem of top management control
 Require good caliber managers
 Increase problems of control

20.  Customer based departmentation is basically market –
oriented in which department are created around the
market served or around marketing channel
 CUSTOMERS ARE THE KEY TO THE WAY
ACTIVITIES ARE GROUPED
wholesale Retail Hire purchase
export
Marketing Manager

21.  It fulfills the expectation & needs of customer
 Better service to customer
 Fully focus on customer
 Disadvantage
 Their may be duplication of activities
 Co-ordination is difficult
 Conflict

22.  When production activities involve the use of
several distinctive process ,these can be used as
the base for grouping of activities
spinning dyeing Weaving Packaging
Production Manager

23.  Advantage
 Machine can be used effectively
 Economy in operation
 No duplication of activities
 Principle of specialization & division of labor is followed
 Disadvantages
 Heavy cost of operation
 More specialist are essential

24.  COMMONLY CALLED THE “GRID” ORG.
 Matrix orgenisation structure is the realization of two
dimensional structure
 Matrix structure applied when the orgenisation has large
number of smaller projects so that when one project is
completed it resources are directed to other project
 Project manager is appointed to coordinate the activities of the
 Personal are drawn from their respective functional
departments
 Employee should receive instruction from two boss
 Application:-insurance & retailing , manufacturing electronics
equipment ,industrial product

25. • MANA
GER
Producti
on
Marketin
g
Finance personnel
• PROJEC
T A
• prod • Mktg • Finance • pers
• PROJEC
T B
• prod • Mktg • Finance • pers
• PROJEC
T C
• prod • Mktg • Finance • pers
• PROJEC
T D
• prod • Mktg • Finance • pers
DIRECTOR-ENGG. **
Project authority
Line authority

26.  Matrix structure focuses resources on single project ,
permitting better planning & control
 Flexible structure compared to traditional hierarchical
structure
 It improves motivation because people can focus more
on completion of one project than they can in the
traditional functional structure

27.  People have to work under multiple command
 Delay in decision making process

28.  Companies have been using an organizational
device generally referred to as a strategic
Business unit (SBU).
 Distinct businesses set up as units in a larger
company to ensure that certain product or
product lines are promoted and handled as
though each were an independent business.

29.  The virtual organization is a rather loose
concept of a group of independent firms or
people that are connected through, usually,
information technology.
 This firms may be suppliers, customers, and
even competing companies.

30.  The aim of virtual organization is to gain access
to another firms competence, to gain flexibility,
to reduce risk, or to respond rapidly to market
needs.