INTRODUCTION
Departmentation is an aspect of the organisation process that entails the grouping of Departmentation. shared activity under the supervision of a single person The activities are classified according to the organization’s functions. A top executive of the involved organisation is in charge of this task.
MEANING
Departmentation refers to the process of grouping comparable corporate operations into units in order to facilitate seamless administration at all levels.
DEFINITION
Koontz and O’Donnell, “A Departmentation is a process of dividing the large monolithic functional organisation into small and flexible administrative units.”
Departmentation refers to the classification of activities on operations of an undertaking into functionalised categories.
Departmentation is an essential one in the modern business world. All the business activities cannot be looked after by a single individual. The classified activities bring in specialisation and managerial convenience. It ensures suitable span of control. Departmentation is created in product-wise, process-wise or area-wise. It ensures proper directions to and control on them.
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PROCESS OF DEPARTMENTATION
- Work identification.
- A detailed examination of each piece.
- A description of the organization’s purpose.
- Assigning the responsibilities to a separate person with expertise in the subject and equipping him with appropriate personnel.
- Establishing the department leaders’ power and responsibilities.
NEED AND IMPORTANCE OF DEPARTMENTATION
1. Employees’ working efficiency is improved via departmenting. The rationale for this is that departmenting makes it easier to combine tasks that are similar in nature.
2. The organization’s tasks have been assigned to numerous executives. It causes the executive to be more alert and productive in his work.
3. Department heads (managers) are granted specific rights and are free to make decisions on their own. It elevates the department leaders’ status and abilities.
4. The top management evaluates the various departments’ operations, and the departments that are not adequately managed are recognised. This increases the efficiency of department leaders.
5. Because the executives’ tasks are fixed and there is function-wise departmentation, the organisation has the potential to grow.
6. Departmenting also has additional benefits, such as making budgeting easier, controlling spending more effectively, achieving specialisation, and improving management coordination.
FACTORS IN DEPARTMENTATION
1. Specification: Departmenting also has additional benefits, such as making budgeting easier, controlling spending more effectively, achieving specialisation, and improving management coordination.
2. Control: There should be adequate control and simplicity of the control process under departmentation. As a general rule, another person, a different executive, should be able to verify the action of one person automatically.
3. Co-ordination: The whole firm is divided into departments, which need coordination. The purchasing department should be close to the manufacturing department. The reason for this is because the purchasing department must assist the manufacturing section. This will greatly facilitate work coordination.
4. Securing attention: Even a business action that is unusually essential should be acknowledged inside the organisation. It is to secure an organization’s success. If the activity requires more attention, it may be assigned to a distinct division or a higher level of an organisation, depending on its relevance.
5. Recongnition of local conditions: The departmenting should take into account the local conditions of the area in question.
6. Economy:It is important to remember that the formation of different departments incurs costs. It entails avoiding superfluous spending while allowing for required spending. If the departmentation is done on a shoestring budget, the departmentation will be ineffectual.
BASIS OF GROUPING DIVERSE ACTIVITIES
1. Maximum use: The word “maximum usage” refers to a certain activity being assigned to the primary department that uses it the most. The manufacturing department, for example, may be responsible for warehouse utilisation and traffic control.
2. Interest: If a superior is also most ready and competent to serve, he is asked to oversee a new endeavour. A person in the sales department, for example, wishes to work in the accounts department. If such an opportunity is presented to a person, he will eagerly participate in the activities.
3. Competition: The current level of competitiveness across departments is good. When activities are grouped together, team spirit might grow as well. Within the same organisation, rivalry refers to the competition that exists between two sales departments or manufacturing divisions.
A sibling firm may occasionally be involved in a comparable line of activity. If a single individual is assigned to work towards the eradication of rivalry between parent and sister concerns, the company as a whole will be destroyed. To put it another way, a single sales manager will be responsible for both parent and sister concerns.
4. Policy matter: A certain activity may be given to a department that shows more enthusiasm for the unit. As a matter of policy, the granting of credit to customers and the recovery of debt from debtors may be delegated to the finance department rather than the sales department of an organisation.
5. Separation: The highest level of activity division entails a considerable operational expense for management. When an action is complicated by many functions, however, a separation is needed.
6. Proper attention: Certain tasks require special care in order to avoid death under bad conditions. If a routine task is handed to higher authorities who do not deem it significant, they will not be satisfied with the results. As a result, this sort of routine activity should be delegated to someone else.
7. Co-ordination: There is a requirement for coordination of numerous activities if the organization’s operations are divided into several departments. The general manager may be in charge of such coordination.
BASIS (PATTERN) TYPES OF DEPARTMENTATION
Within an organisational framework, there are a few fundamental strategies for distributing roles and responsibilities. They are as follows:
1. Departmentation by functions.
2. Departmentation by product or service.
3. Departmentation by regions (area or location) or territory.
4. Departmentation by customers.
5. Departmentation by process.
6. Departmentation by time.
7. Departmentation by numbers.
8. Departmentation by marketing channels.
1. Departmentation by Functions: The most prevalent method of departmentation is based on functions. The activities are organised into departments based on the functions that must be completed. The diagram below can help you understand how departments are organised by function:
Each department is led by a single accountable individual who reports directly to the General Manager. According to George R. Terry, “the functions or activities are the pivot around which effective executives develop effective and efficient organisation”.
ADVANTAGES
1. It’s a tried-and-true scientific procedure.
2. It is based on the specialisation and division of labour ideas.
3. It guarantees proper performance management.
4. It maintains the importance of each of an organization’s operations.
5. It prevents ancillary groups from interfering with core tasks.
6. Departmental managers are given due weight and reputation, and they are regarded by senior management.
7. It makes it easier to coordinate activities within the department and throughout the organisation.
8. It is cost-effective, straightforward, and simple to comprehend.
9. It facilitates the organization’s use of labour and other natural resources.
Disadvantages
1.It makes managerial control more challenging.
2. Department heads saw themselves as autonomous parts of the organisation. The management will not view the project as a whole.
3.It increases departmental managers’ workload and responsibilities.
4.It does not provide any opportunities for managers’ general growth through training.
5. Departmental managers are specialists in solving problems within their own departments. They might not comprehend the difficulties of other departments.
2. Departmentation by Product or Service: The large-scale business unit creates this form of departmentation. Different sorts of items can be manufactured and sold by a same company unit. After then, each product or service is assigned to its own department. Within the overall structure of the company, functionalized units for each product are developed.
Each sort of product has its own manufacturing, sales, finance, and staff operations. Each department is in charge of producing and marketing a product to clients. Within each product segment, all operations are organised in advance. The top management performs the coordination function.
Advantages
1. Product departmenting aids in the most efficient use of workers’ personal efficiency in the manufacture and marketing of products.
2.Because of the big scale operation, there is a chance of reaping economies in product manufacture and marketing.
3. The consumer may receive better services.
4. Management is aware of the profitability of each product. As a result, assigning responsibilities to department heads is simple.
5. The production of a product may get adequate attention.
6. Managers are responsible for all functions related to the production of a certain product. Then there’s the chance for effective coordination and control.
7. A new product line may be launched without trouble.
Disadvantages
1. There is a risk of task duplication.
2. It increases the number of employees, which raises the operating costs.
3. Maintaining a sales team for each sort of goods incurs additional costs.
4. The challenge of executive control becomes increasingly complex as the number of employees grows.
5. Each product department’s machines and equipment may not be completely used.
3. Departmentation by Region or Area: This type of departmentation may be appropriate for a completely distributed business unit. The company activities are divided into areas, each of which is overseen by a particular individual. In each location, locals are appointed as salespeople. It will assist the company in increasing sales. The rationale for this is that a local is more knowledgeable with the local language, culture, and consumer preferences.
1. It allows for a more effective control range.
2. It lowers the cost of operating while also saving time.
3. With comprehensive understanding of the tastes and preferences of the customers in the local market, sales may be boosted.
4. Customers’ trust in regional managers may be restored, and rivals could be driven out of the market.
5. Accounts are organised by region. As a result, management is aware of the profitability of each sector.
6. It gives managers the chance to enhance their skills in a variety of areas.
7. This organisational structure is better suited to a huge corporation.
8. Controlling the process is simple.
Disadvantages
1. It raises the number of employees and has a high operational expense.
2. The control of the headquarters is ineffective.
3. It might also mean duplication of effort.
4. A tiny firm cannot afford to operate at such a high expense.
4. Departmentation by Customers: This sort of departmenting is preferred when the various demands of customers are diverse.
A bank or financial organisation, for example, could split its lending section into several headings and allocate them to different departments, such as loans to businesspeople, farmers, and professionals. Similarly, a company’s sales department might be separated into two categories: industrial items and consumer goods. Consumable commodities can be further separated into perishable and non-perishable categories.
Advantages
1. It meets clients’ expectations and requirements.
2. It fosters specialisation among organisational personnel.
3. Customers may get rid of out-of-style items by using the departmentation system. The reason for this is that the customer’s likes and preferences are well-known to the business unit.
4. Each segment of the client receives superior service from the firm, assisting the company in gaining customer loyalty.
Disadvantages
1. There may be some overlap in activities.
2. Coordination is extremely tough to accomplish.
3. There is a waste of resources and facilities that are available.
4. The manufacturing operations cannot be organised using these departmentalization strategies. If this is the case, the operating costs will be significant.
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5. Departmentation by Process: When manufacturing operations are spread over many locations, this sort of departmentation is used. Ginning, spinning, weaving, dyeing and printing, packing, and sales are only a few of the departments of a textile mill. Each part will be overseen by a team of specialists.
Advantages
1. The more expensive devices can be put to good use.
2. Other manufacturing processes are not disrupted by the departments or procedures. Any process’s requirements and renewals must not interfere with the production of other processes.
3. There might be some cost-cutting going on.
4. There are no activities that are duplicated.
5. This method of departmentation follows the notion of specialisation and division of labour.
6. This division aids senior management in maintaining efficient performance control.
7. This organisational structure is best suited to any company unit that produces a product that goes through several steps.
Disadvantages
1. All processes should have their own operating rooms and other amenities. As a result, operating costs are high.
2. Each procedure requires more professionals.
3.It does not provide adequate training to employees and does not invest in the overall development of management skills.
6. Departmentation by Time: The business activities are categorised according to when they are performed. If the task is not finished during the usual working hours, additional time will be allowed to do it after those hours. Only those who are interested are asked to complete the work, and one person is assigned to monitor them. Whatever job is done outside of usual working hours, it will be handled by a separate department. Departmentation by time is the name for this form of division.
7. Departmentation by Numbers: Small groups are responsible for similar tasks. A supervisor or an executive is in charge of each group. Soldiers in the Army, for example, are divided into squads, battalions, companies, brigades, and regiments based on the number of troops assigned to each unit. This sort of departmentation employs the ideas of span of management, span of control, and span of supervision.
8. Departmentation by Marketing Channels: The channel of distribution chosen by the individual business unit determines this form of departmentation. The business unit usually chooses the distribution channel based on the nature of the items and the product’s marketability. As company has become more market-oriented, this type of departmentation has become more important.
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