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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If workers are not able to carry out the activities efficiently, managers can train them to do so. Subordinates are trained to carry out functions related to each product. In the case of departmentation by numbers, the deparmtentation are grouped on the basis of their performance by a certain number of persons. The focus is completely on one product and all functional activities organisatoin to that product rather than one functional activity related to all products.

Such managers may not be always available. There are several bases of Departmentation.

What is Departmentalization? definition, objectives and methods – Business Jargons

This type of departmentation is useful for the enterprises which sell a product or service to a number of clearly defined customer groups. For example, the activities in the production department may be classified into quality control, processing of materials, and repairs organksation maintenance. These are mentioned below: The sales people belong to local areas of operation.

Each product division is semi-autonomous and contains different functions. Standards of performance for each and every department can be precisely determined.


Quick Notes on Departmentation. Need, Significance and Process. Departmentation by Process 6. With increase in operations of a company, it adds more products to its line of products which require various functional activities production, marketing etc.

Key areas should be given special attention. Meaning of Departmentalisation 2.

Notes on Departmentation: Meaning, Importance and Basis | Organisation

There could be further extension of this basis of departmentation. Functional departmentation is not suitable in such cases. To give the attention to heterogeneous groups of buyers in the market, marketing activities are deaprtmentation split into various several parts. During boom conditions, the demand increases and, therefore, extra load has to be borne by machines. Employees have departmentarion explain to the workers joining the next shift about the stage of completion at which they are leaving the work which may not always be possible.

In large organisations, one person cannot look after all the managerial functions planning, organising etc. The departmentation by process can be shown as Fig 6. Specialisation promotes efficiency, lowers the cost of production and makes the products competitive.

The activities of an organisation should be grouped in such a way that it leads to departmentatiob of work. Departments should be so created as to fix clear responsibilities so as to enable effective control.

Such groups are suitable to organisations serving several segments like a repartmentation company supplying to institutional buyers such as hospitals and government and non-institutional buyers as wholesalers and retail chemists.

It should aim at full utilisation of resources. Top management is relieved of operating departtmentation responsibility and can concentrate on such centralized activities as finance, research etc. When every department looks after one major function, the enterprise is developed and efficiency of operations is increased.


Here we detail out the need and significance of departments, process involved and dangers of departmentation and factors influencing assigning of activities.

6 Different Basis of Departmentation in an Organisation

Similarly, funds required for each product line are different. Though this reduces boredom on the work process, it requires trained workers who can carry out all the processes. The management of the enterprise is made more effective by departmentation. Dividing the business house into various departments makes the co-ordination of various activities very difficult. This method of departmentation may have certain disadvantages, specially when it is followed very rigidly.

He can co-ordinate the efforts of people working under him. Departmentation by Function 2. For a trader, the major activities are buying and selling, a bank performs borrowing and lending functions. Departmebtation are able to promote sales as they are aware of the local conditions of the area where they are operating.

Similarly, other departments should also work in co-ordination with each other. This develops their potential to be promoted to higher managerial positions in the organisation. He ensures that activities are performed strictly according to rules and procedures laid down for the department.