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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This basis of departmentation is suitable for small sized organisations which produce a limited line of products. Creating departments and sub-dividing the work of departments into smaller units creates organisation structure. Departmentation, thus, deppartmentation in expanding an organisation and also promotes efficiency by dividing the work on the basis of specialisation of activities and appointing people in various departments on the basis of their specialised knowledge.

Departmentation: it’s Meaning and Definition – Explained!

The management of the enterprise is made more effective by departmentation. So, in this way, the entire organization is divided into parts, i.

With increase in operations of a company, it adds more products to its line of products which require various functional activities production, marketing etc. Functional departmentation is not suitable in such cases.

A regional division achieves a better co-ordination and supervision of activities in a particular area. It can simplify the tasks of management within a workable span. It is necessary to get the co-operation of everybody in the organisation to make it a success. Division of work into departments leads to specialisation as people of one department perform activities related to that department only.

The production, purchase, personnel and marketing activities are looked after by departmental managers but finance is vested at the headquarters. They can directly communicate with the consumers and frame policies to satisfy their needs.

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Departmentation helps in the development of managerial skill. Leave a Reply Cancel reply Your email address will not be published. Departmentation is the process of grouping various activities into separate units of departments. This helps in eliminating the unprofitable products and promoting the profitable ones thereby increasing organisational efficiency.

The form of organisation structure depends upon the basis of departmentation. Departmentation can provide a necessary degree of specialisation of executive activity for efficient performance. Each product manager is in charge of his product line though general managers of various functional areas provide them the necessary support.

6 Different Basis of Departmentation in an Organisation

Departmentation creates departemntation, assigns tasks to people, fixes their responsibility and accountability to their departmental heads, creates a span of management so that work can be easily supervised.

The employees become so focused on departmental goals that they lose sight of the overall organisational goals. This is possible through shift duties.

An organisation selling stationery, for example, also starts selling cosmetics and pharmaceuticals. This type of departmentation provide the benefits of both functional and product structures.

He cannot adapt the organisation to its internal and external environment. Departmentation should also consider the human aspect in the organisation. Step 1, Step 2, and Step 3. Marketing department, for instance, can be orgsnisation branched out on the depwrtmentation of territorial or geographical departmentation.

Priorities are set and resources are allocated according to the need, importance and urgency regarding their use by different departments. It renders the task of fixation of accountability for results very easy since activities are well defined and responsibilities are clearly laid.

depattmentation The sales people belong to local areas of operation. There should be some agency to co-ordinate the activities of various departments. It is helpful in fixing responsibilities and accountability. Top managers find it difficult to hold accountability of any one department for failure of the product in the market.


Service functions are duplicated both at the top and at the operating levels of management. Consumer department managers cannot easily organisatioh policies for their departments because of changing consumer behaviour. This helps the organisation to assign the work only to those who are best suited.

People working in one department are closely knitted and work collectively towards achievement of departmental goals. He, thus, controls activities of his department to ensure that the product contributes to the organisational goals. If planned performance is not achieved, the department responsible becomes answerable. Product departmentation is suitable for product diversification where marketing characteristics of each product are different from others.

Coordination becomes difficult when departments focus excessive attention on activities of ortanisation departments without linking their performance with other departments. There are a few dangers of departmentation which should be taken care of while assigning and grouping of activities: Quick Notes on Departmentation. It is suitable for organisations having wide geographical market such as pharmaceuticals, banking, consumer goods, insurance, railways etc.

Each product division can be taken as a viable profit centre for accountability purposes. There are problems of co-ordination and supervision of employees who work in shifts. The same product may be of industrial use for one buyer and personal use for another.

It provides for fixation of standards for performance appraisal and thus ensures effective control. The organisation organisattion of departmentation by process or equipment in the manufacturing department of a textile industry has been shown in Fig. You must be logged in to post a comment.