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Presentation on

Departmentation

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“Departmentation implies the division of thetotal works of an enterprise into individualfunctions and sub-functions”.

Grouping of activities into departments,divisions or other homogeneous units isknown as departmentation.

Meaning ofDepartmentation

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Specialisation- departmentation enables an organisation to avail of the

benets of specialization .  Expansion-  one manager can supervise and direct onl a few

subordinates. Grouping of activities and personnel into departmentsmakes it posssible for the enterprise to e!pand and grow.

 Autonomy-  department results in the division of the enterprise intosemi-autonomous units. "he managers of these units are givenade#uate freedom. $t provides %ob satisfaction and motivation.

 &ppraisal

'i!ation of responsibilit 

(anagement development 

 &dministrative control

Need & Importance ofDepartmentation

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). Departmentation of functions

*. Departmentation b products

+. Departmentation b territor 

. Departmentation b customer . Departmentation b process or e#uipment 

. Departmentation b time and numbers

/. 0omposite departmentation

Types of Departmentation

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$n functional departmentation each ma%or or basicfunction is organized as a separate department.1roduction, sales, nancing and personnel arebasic functions in a manufacturing enterprise. $nother hand in a retail store buing, selling andnance are the ma%or functions.

FunctionalDepartmentation

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Advantages andDisadvantages1. It is the most logical, time

proven & natural form ofdepartmentation.

2. It facilitates delegation ofauthority.

3. It ensure the performance ofall the activities.

4. It eliminates costlyduplication of eort.

5. It provides occupationalspecialisation which maesoptimum utilisation ofmanpower.

1.  !here is too much emphasison specialisation

2.  !here may "e con#ict"etween departments as

the respons"ilities areinterdependent.

3. $unctional departmentsmay grow in si%e to ustifytheir costs.

4.  !here may "e di'culties incoordinating the activitiesof dierent departments.

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In product or service departmentaion, everymaor products is organi%ed as a separatedepartment. (ach department loos after theproduction, sales and )nance of one product.

Advantages:–1. *roduct departmentation can reduce the

pro"lem of coordination "etween production

and sales activities.2.  !he performance of each product division

and its contri"ution to overall results can "eeasily evaluated.

3. It is more #e+i"le and adapta"le to change.

Product Departmentaion

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1.  !here is duplication of physical facilities andfunctions.

2. ore persons with general managementa"ility are re-uired.

3. (ach product manager asserts his autonomydisregarding the interests of the organi%ation.

4. It creates the pro"lem of eective control overproduct division "y the top management.

5.  !here may "e underutili%ation of plantcapacity when the demand for a particularproduct is not ade-uate.

Disadvantages:-

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 !erritorial departmentation is related to alarge scale enterprise whose activities aregeographically spread over a wide area. $ore+ample "ans, insurance companies,transport companies distri"ution agencies.

TerritorialDepartmentation

oard ofdirectors

anaging

director

/orthernregion

0esternregion

entralregion

(asternregion

outhernregion

ranch 1 ranch 2 "ranch3

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Advantage andDisadvantage1. It helps in achieving the

"ene)ts of local operations.

2. It results in savings infreight, rents and la"ourcosts.

3. It facilitates the e+pansionof "usiness to variousregions.

4. (very regional managercan specialise in thepeculiar pro"lems of hisregion .

1.  !here may "e friction

"etween regionalmanagers.

2. ll activities of a )rm

may not "e amena"le toterrittorialspecialisation.

3. oordination and controlof dierent "ranches

from the head o'ce"ecome less eective.

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In this departmentation, the activities aregrouped according to the type of customers.

 !his type of departmentation is useful for"ans, departmental stores etc. which sell aproduct of service to a num"er of distinctand clearly de)ned customer groups.

ustomer Departmentation

oard of directors

anaging irector

$inance *ersonnelareting *roduction

wholesale (+ports etail

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Advantages andDisadvantages1. pecial attention can "e

given to the particulartastes and preferences ofeach class of customers.

2.  !he "ene)ts of

speciali%ation can "ederived.

3.  !he enterprise gainsintimate nowledge ofthe needs of each

category of customers. 

1. s such departmentation isapplied only to salesfunction, there may "edi'culties in coordinatingthe activities of dierent

functions.2. It may lead to duplication

of activities and heavyoverloads.

3. anagers of customersdepartmentation may put

pressures for specialfacilities and "ene)ts.

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 !his is the departmentation in whichactivities are grouped on the "asis ofproduction process or e-uipment involved.

 !his is generally used in a manufacturingenterprise and at lower level oforgani%ation.

$or e+ample a te+tile mill may "e organi%ed

into ginning, spinning, weaving and dyeingdepartments

Process or !"uipmentDepartmentation

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Advantages andDisadvantages1.  !here is clear cut

technical division ofwor.

2.  !his ensuresspeciali%ation and

facilitates training of uniors e+ecutives.

3. It is possi"le to appointpersons with specialeducation and

e+perience for eachprocess

1.  !here may "edi'culties incoordinating dierentprocess departments

2. on#ict amongmanagers of dierentprocess may arise.

3. It is suita"le only for

special and compositetype of plants.

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6nder this "asis, activities are grouped onthe "asis of the time of their performance.$or e+ample a factory operating 24 hoursmay have three departments. 7ne each formorning, day and night shifts.

 !he idea is to o"tain the advantages ofpeople speciali%ed to wor in a particular

shift.

Time Departmentation

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ompositeDepartmentation

anaging irector

0ors anageraretinganager

$inance anager

onsumer*roduct division

Industrialuppliesdivision

omestic salesmanager

(+port salesmanager

*rivate uyers8overnment

gencies

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Thank you