Departmentation

Introduction
What is Departmentation?

Process of dividing activities into units & subunits

Not only confined to term departments but it includes divisions, sections & job also

Common Bases For Departmentation

Knowledge & skills-People are grouped by what they know Work process-Workers are grouped based on the process or activity used by the worker Business Function-Grouping by the basic function in organization Time- When work is done, for example: shifts in a factory or hotel or hospital

Contd

Output-Grouping based on the products or services that the employee works on Client-Grouping based on the type of clients their work is ultimately sold to Places-Groups are based on the geographical areas that they serve

Need for Departmentation

Specialization- Departmentation should reflect the specialization in performing work Coordination- Best results achieved when activities are performed in coordination Control-Process of analyzing whether intended results are being achieved.

Contd

Economy-Balance should be maintained b/w cost of creating a department & its contributions Local conditions-More important for organizations operated in different geographical areas Human considerations- Human factor plays an important role

Major Benefits of Departmentations

Specialisation Administrative control Fixations of responsibilities Freedom or autonomy Development of managers

Disadvantages

De-emphasis of overall companys objectives Reduces coordination b/w functions Responsibility for profits is at the top only Slow adaptation to change in environment Limits development of general managers Overspecializes & narrow viewpoint of key personnel

Ideal Principles of Departmentation

Principle of attainment of enterprise objectives Principle of comprehensive department Principle of inter-departmental co-operation Principle of promotion of specialization Principle of cost benefit analysis

Contd

Principle of top-management control Principle of flexibility Principle of better utilization of resources Principle of human consideration Principle of special attention to key-results areas Principle of autonomous feeling of departmental heads

Types of Departmentation
Functional Departmentation:- Grouping of departments is done on the basis of functions such as production, finance, marketing sales purchase & personnel Further sub division of functions may be formed like marketing can be divided into advertisement sales & after sales

Contd...
CEO

PRODUCTION

FINANCE

MARKETING

PERSONAL

ADVERTISEMENT

SALES

MARKET RESEARCH

Contd

Functions divided into 2 parts:Basic functions- Production Marketing finance & personnel Secondary functions-Further parts of basic functions like production- production planning , R&D, quality control & marketing handling

Advantages & Disadvantages of Function

Advantages: Advantage of specialization Easy control over functions Pinpointing training needs of manager Very simple process of grouping activities Disadvantages: Lack of responsibility for the end of result

Contd

It leads to increase conflicts & coordination problem among departments Overspecialization or lack of general management

Types of Departmentation
Products Departmentation:- Grouping of activities & departments formed are given name on the basis of products manufactured in an organization Applied where there is a large range of products are manufactured Applied where there are several product lines & functional departments fails

Contd

CEO

HEAD TV DIVISION

HEAD AC & REFIGRATION

HEAD COMPUTER

Advantages & disadvantages of Products

Advantages: Ensures better consumer services. Unprofitable products may be easily determined Assist in development of all around managerial talent Makes control effective

Contd
Disadvantages: Expensive as duplication of service functions occurs in various product divisions Customers & dealers have to deal with different persons for complaints & information of different products

Types of Departmentation

Territories Departmentation: Geographical regions are adopted for main division as well as for subdivision purposes Territorial departmentation are adopted when organizations activities are physically dispersed in different locations Useful where business is on international & national level

Contd

CEO

HEAD NORTH ZONE

HEAD EAST ZONE

HEAD WEST ZONE

HEAD SOUTH ZONE

Advantages & Disadvantages of Territorial

Advantages: Cater to meet the needs of local people more satisfactorily It facilitates the effective control Assists in development of all- round managerial skills

Contd
Disadvantages: Communication problem b/w head office & regional office due to lack of communication at some places Coordination b/w various divisions may become difficult It leads to duplication of activities which may cost higher

Types of Departmentation

Customers Departmentation: When departments are made to cater different kind of customers Widely followed in subdividing activities of the marketing department Helps in supplying good in accordance with the peculiar needs of customer

Contd

HEAD MARKETING

HEAD WHOLSALE

HEAD RETAIL

HEAD EXPORT

Advantages & Disadvantages of Customer

Advantages: It focused on customers who are ultimate suppliers of money Better service to customer having different needs & tastes Development in general managerial skills

Contd
Disadvantages: Sales being the exclusive field of its applications , coordination may appear difficult b/w sales function & other enterprise functions Specialized sales staff may become idle with the downward movement of sales to any specified group of customers

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