Explain departmentation

These are mentioned below: a There may be conflicts between departments. Due attention to the human factors will make departmentation more effective and more efficient. For example, the activities in the production department may be classified into quality control, processing of materials, and repairs and maintenance.

The process of the departmentation generally follows no stiff rules but the main purpose of carrying on with the process of the departmentation is to provide the level of the convenience to each of the organization.

Demerits of departmentation by customer 1.

departmentation by function

It is neither authority nor responsibility. Efficiency can be achieved if departments are created for each process as each one has its peculiarities. But once the various activities have been identified, it is necessary to group them together on some logical basis so that a team can be organised.

Hence, some salesmen have to remain idle. The departmental managers can delegate tasks and duties to the subordinates, and they are accountable to the chief executive for the performance of the department.

Divisional departmentation

The divisions act as the profit centers. The subordinates assigned to them, where the superior retains ultimate responsibility for getting the job done. In the case of departmentation by numbers, the activities are grouped on the basis of their performance by a certain number of persons. Authority is vested in a particular position not to the person, because, authority is given by an institution and is, therefore, legitimate or legal. Territorial grouping may sometime cause some problems if authority over financial matters is also decentralized. This is why independent outside accountants must review the financial statement, and accountability forces them to be careful and knowledgeable in their review. Departmentation by Product This type of departmentation is desirable for large undertakings which deal with a variety of products or product lines. This type of departmentation is useful for the enterprises which sell a product or service to a number of clearly defined customer groups. So, the basis of departmentation should ensure that the dissimilar activities are put together in one department. It saves money and consequently reduce the cost of production. If the subordinates fail to perform the job operating responsibility , the superior is held responsible for the failure. Lastly, assignment of work to manageable units can be effectively made under divisionalised structure of organisation. Hence, some salesmen have to remain idle. In this case, the firm shows its paramount interest in the welfare of the customer and attention given to them.

Related Articles:. Responsibility has two dimensions. Departmentation by the location or the place — a.

Departmentation and decentralization

Methods of Departmentalization Departmentalization by Function: When the creation of department is on the basis of specified functions, such as production, marketing, purchase, finance etc. Number basis. The obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner. Disadvantages: This method of departmentation may have certain disadvantages, specially when it is followed very rigidly. It focuses on special customer needs. Departmentation provides help in both these areas. 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 basis for top management to have effective co-ordination and control over the various departments.

It is a logical and time proven method. This danger can be averted by centralizing all major policy decisions.

Case study on departmentation

Successful managers will be tempted to acquire more and more powers and build up their own empire. For instance, a large readymade garment store may have a separate department each for men, women, and children. These are explained below: A Departmentation by Functions: The enterprise may be divided into departments on the basis of functions like production, purchasing, sales, financing, personnel etc. Customers are the key to any organization. Grouping of activities and, consequently, of personnel, into departments makes it possible to expand an enterprise to any extent. Standards of performance for each and every department can be precisely determined. Objectives of Departmentalization To simplify the process and operations of the organization To maintain control Departmentalization of activities results in the increase in efficiency of the management and ultimately the enterprise. Sales activities can be conducted more effectively. These are mentioned below: a There may be conflicts between departments. Image: Departmentation by Process Chart 4. With the help of the departmentation, proper attention can be given to the various activities and hence, resulting in the growth of the organization. It should aim at full utilisation of resources.
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What is Departmentation?