Departmentation, thus, helps 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. If planned performance is not achieved, the department responsible becomes answerable. While marketing strategies for cosmetics need to be intensive, it is not so in case of stationery or pharmaceuticals. Basis of Departmentation : The form of organisation structure depends upon the basis of departmentation. Each of the last two sell this brand along with several others. Process Departmentation Process departmentation is found in those industries which involve different processes of production. Process Departmentalization is a manner or practice of implementing a process through combining related activities into separate groups or specialized functional areas which are distinct from each other.
Thus, departmentation means the process of grouping the various activities into separate unit. Departmentation Types Departmentation Types can be made on the basis of: 1. Delayed decisions: Since decisions are made by departmental heads for their respective departments, it may delay decision-making for the organisation as a whole. It is also a costly form of departmentation as each shift has separate functional departments. It has also been viewed as the process of specializing the work of the management according to place, product, patronage and process. Flexibility: In large organisations, one person cannot look after all the managerial functions planning, organising etc.
Finance department creates departments to look into capital budgeting fixed assets and current assets, cash management and budgets. However, care should be exercised in adopting matrix departmentalization. Co-ordination: Water-tight compartments are sometimes created amongst departments as people show loyalty towards their departmental managers. Within the service sector, we find medical or firefighting services available round the clock, all days of the week. Marketing department, for instance, can be further branched out on the basis of territorial or geographical departmentation. These sub-departments can be further sub-divided if needed. Unequal development of customer groups.
Jobs may be grouped according to the type of customer served by the organization. This structure provides the organization the advantage of developing personnel with a high level of expertise and specialization for each of its products. Some of the disadvantages are that, it becomes more difficult to get quick decisions or action on a problem because functional managers have to report to central headquarters and may have to wait a long time before a request for help is acted. Under this all work of same kind ar … e performed in a particular department. Thus, customers of different regions with different tastes and preferences for the same product are looked after by geographical departments set up in their territories. When you have a huge job to be done, just like a big commercial organization has, it becomes difficult to manage each and everything by your own because you have to keep records of so many things.
So, in this way, the entire organization is divided into parts, i. Furnishes measurable training ground for Managers. The creation of a series of smaller departments enables the executives to get them specialised within a narrower range of activity. This type of department may be as follows: In this type of departmentalization, decisions are made fast, because the decisions are made at a point near the operation. It exists for the life of the project and then disbanded. With this type of assignment, the executives can focus their experience and interest only on that work assigned to them departmentally rather than concentrating on overall company interests and policies.
There may be chances of heavy centralization in decision-making. On the other hand, the problem of aligning individual and organizational goals remains. One advantage of this method is that it ensures the development of expertise specific to the political, social, and cultural needs of the region. Supervisors and managers are appointed to manage these departments. It is used mainly by smaller firms that offer a limited line of products because it makes efficient use of specialized resources. Product Departmentation Under this basis of departmentation, the business is divided into a number of departments on the basis of product handled by the firm. This often creates less flexibility, and the unit of action within the firm.
On the other hand, the sense of independence may result in a drift-off from the achievement of the overall objectives of the organization. This method of departmentation results in optimum utilisation of machines as they work continuously which otherwise may remain idle. Priorities are set and resources are allocated according to the need, importance and urgency regarding their use by different departments. The major disadvantages of this type is that it promotes fierce internal competition which may or may not be healthy and there is a lack of coordination among different divisions unless the central management retains the policy making and financial management authority. The departmental heads will report to the Chief Executive. Creating departments focuses on departmental activities and facilitates co-ordination. Departments are created on the basis of products and product manager has the authority to carry out functional activities for his department.
However, when dedicated in-house departments are created, sometimes they add to staff and operational costs because the support work required may vary and during the down-side of fluctuating type of business. Complexity: As organisations grow complex in terms of size and operations, they add more products to their line of products and expand into new geographical areas for marketing the existing products. It is helpful in fixing responsibilities and accountability. Economically: Many people opening little local stores find themselves competing with large departmental stores, which in turn have them only buying what is needed to meet the demand of the people surrounding. For example, a job requires three steps for its completion. If different departments work at different speed, co-ordination amongst different processes becomes difficult. The advantages of such departmentation types are: 1.
They can directly communicate with the consumers and frame policies to satisfy their needs. Departments and levels emerge from the grouping of activities. Responsibility for profits is at the top only. Departmentation on the basis of product is made where the business has produced a number of products. The production, purchase, personnel and marketing activities are looked after by departmental managers but finance is vested at the headquarters. A for separating the activities performed within an into groups differentiated by the they perform.