Departmentalization (or simply departmentation) refers to the grouping of This helps the organisation to assign the work only to those who are best suited. Departmentation can provide a necessary degree of specialisation of executive activity for efficient performance. It can simplify the tasks of management within a . In the words of Allen, “Departmentation is a means of dividing a large and monolithic functional organisation into smaller, flexible, administrative units.”.
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The machine cannot be stopped in manufacturing steel and workers, therefore, have to work in shifts.
Departmentation by Process 6. There are opportunities to improve performance in their area of specialisation. Another important factor to be considered while creating separate departments is the expense involved and economy in its operations. Functional managers do not get training for top management positions. The territory may be known as district, division or region.
Departmentation: it’s Meaning and Definition – Explained!
In product departmentation, every major product is organised as a separate department. This method is suitable for large-scale organisations who can afford its cost.
Each geographic unit has resources to cater to the needs of consumers of that area. After reading this organiation you will learn about: A large industrial buyer for one product, for example, may be a small buyer for another product. If planned performance is not achieved, the department responsible becomes answerable. Need, Significance and Process Departmentation: Importance of Departmentation 3.
The oorganisation, purchase, personnel and marketing activities are looked after by departmental managers but finance is vested at the headquarters. Each department looks after the production, sales and financing of one product.
Departmentation: Need, Significance and Process
This basis is suitable for large-sized organisations which have activities dispersed over different geographical areas. Organisation involves dividing and grouping of activities to be done in an enterprise. Departmentation enables an enterprise to avail of the benefits of specialisation. In the case of departmentation by numbers, the activities are grouped on the basis of their performance by a certain number of persons.
There are problems of co-ordination and supervision of organiastion who work in shifts.
Notes on Departmentation: Meaning, Importance and Basis | Organisation
The costs and revenues of all the products can be compared. The main advantage of following this type of departmentation is that particular needs of the particular- customers can be solved. It is suitable for organisations where limited number of products are produced. Standards of performance for each and every department can be precisely determined.
Each department is headed by a person known as departmental manager. First the organisation is divided on the basis of functions. The actual number of organisationn in which a business house can be divided depends upon the size of establishment and its nature.
Your email address will not be published. Thereafter, some other basis of departmentation has to be used. It would have been a very difficult and complicated task to manage a large undertaking without divisionalisation. There could be further extension of this basis of departmentation. In a multiproduct organisation the departmentation by product most suits. These are mentioned below: Here, the market is broken up into sales territories and a responsible executive is put in charge of each territory.
Product departmentation, along with various functional areas appear on the organisation chart as follows: While some of the functional activities are decentralised, others are centralised.
Denotes the combined base departmentation. Clear identification of customers and their needs is the basis of customer departmentation. Dividing the business house into various departments makes organisarion co-ordination of various activities very difficult.
The aim is to facilitate the carrying out of the activities efficiently for achieving overall results. The maintenance departmentayion plant can be done in better way and manpower can be utilised effectively. The marketing department is further divided on the basis of product lines i. The choice of departmentalization basis is influenced by the factors such as the degree of specialization, coordination, control, cost consideration, adequate attention to key areas, etc.
They can be gainfully employed during evening or night shifts. The executive under this system will also get a chance to exhibit his skill and experience regarding various problems to be handled in his department—thereby the departmrntation for top management to have effective co-ordination and control over the various departments.
Even for large organisations, it is suitable only for top levels. One manager can supervise and direct only a few subordinates.
It may be difficult to provide efficient centralized services to various departments located in different areas. Flow of work from one level to another and for every department, i. Personal skill and specialised knowledge of the production managers can be organosation utilised.
Departmentation: Need, Significance and Process
Demand for the same product for same set of consumers differs during different times. Thus, performance appraisal becomes more effective. Service functions are duplicated both at the top and at the operating levels of management.