Management -- Departmentation of Oraganisation needs and demerits with various types

1. Departmentation
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2. Objective :
to manage a large undertaking
to assign the work only to those who are best
suited
to facilitate the carrying out of the activities
efficiently for achieving overall results.

3. Meaning :
Process of dividing activities into units & subunits
Division of work into smaller units and their re-grouping
into bigger units as per the similarity of features.
Grouping common activities of a organization on the
basis of a function under a single person control.
Process of integrating similar activities of business into
units for facilitate smooth administration at all levels.

4. Definition:
Departmentation is the classification of activities and
organizations into units and sub-units on the basis of
operations and functions, so that each unit (called
Department) will work smoothly and separately for each
other .
◦ Each department is headed by a person called departmental
manager.

5. Example:
Organizational Structure of Unilever
◦ Product Groups-
◦ Food & Drinks
◦ Detergents
◦ Frozen Products
◦ Chemicals
◦ Personal Products
◦ Agribusiness
◦ Edible Fats & Dairy Products
◦ Geographic Regions-
◦ Europe
◦ East Asia
◦ North America
◦ Latin America
◦ Central Asia
◦ Functional Areas
◦ Finance
◦ Commercial
◦ R&D
◦ HR
Unilever the Anglo-Dutch MNC has top
management team consisting of the
Chairperson & two Vice Chairpersons.

6. Why Departmentation:
Effective control on expenditure
Budget preparation
Better coordination
Work analysis
Attaining specialization
Fixations of responsibilities
Freedom or autonomy

7. Other needs and importance:
Increases the operating efficiency of the employees
Makes the executive to be alert and efficient in his duties
Increases the prestige and skills of the departmental heads
Makes the departmental heads efficient
Easy to further expansion of the organization

8. Major problems:
De-emphasis of overall company’s objectives
Reduces coordination b/w functions
Responsibility for profits is at the top only
Slow adaptation to change in environment
Limits development of general managers
Overspecializes & narrow viewpoint of key personnel

9. There are certain danger points in the
process of departmentation,
the work of co-ordination becomes difficult;
the greater the number of departments and particularly levels, the more complicated becomes
the task of co -ordination. The managerial efficiency and the overall output would be lesser
because of poorer coordination
 the work of communication, control, supervision and planning appears more difficult and
enhances the cost of managing an enterprise
 there is remote possibility of direct contract between top management and operative
personnel because of the layering of executives
This causes a loss of morale on the part of subordinates. In short, levels are expensive in terms
of money and effort and undermine operating efficiency of the business.

10. Factors for departmentation:
Specification
Coordination
Control
Economy
Recognition of local conditions
Human considerations
Security attention

11. Factors description
for departmentation,
1.Specialization-
Departmentation should reflect the specialization in performing work
2.Coordination-
Best results achieved when activities are performed in coordination
3.Control-
Process of analyzing whether intended results are being achieved.

12. Factors description
for departmentation,
4.Economy-
Balance should be maintained b/w cost of creating a department &
its contributions
5.Local conditions-
More important for organizations operated in different geographical
areas
6.Human considerations-
Human factor plays an important role

13. Process of departmentation: (HOW)
Identification of work
Analysis of details of each work
Description of the function of the organization
Entrusting the function to a separate person who has
specialized in the respective field
Fixing the scope of authority and responsibility of the
departmental heads

14. Basic types and patterns :
Departmentation by Function
Departmentation by Product or Service
Departmentation by Region or Area
Departmentation by Customers
Departmentation by Process
Departmentation by Time
Departmentation by Numbers
Departmentation by Marketing Channels

15. Functional Departmentation:-
Grouping of departments is
done on the basis of functions
such as production, finance,
marketing sales purchase &
personnel
Further sub division of
functions may be formed like
marketing can be divided into
advertisement sales & after
sales
CEO
PRODUCTION FINANCE MARKETING
ADVERTISEMENT SALES
MARKET
RESEARCH
PERSONAL

16. Functions divided into 2 parts:-
1.BASIC FUNCTIONS- PRODUCTION,
MARKETING FINANCE & PERSONNEL
Advantages:
Advantage of specialization
Easy control over functions
Pinpointing training needs of manager
Very simple process of grouping
activities
2.SECONDARY FUNCTIONS- FURTHER PARTS OF BASIC
FUNCTIONS LIKE PRODUCTION- PRODUCTION PLANNING
, R&D, QUALITY CONTROL & MARKETING HANDLING
Disadvantages:
Lack of responsibility for the end of result
It leads to increase conflicts &
coordination problem among
departments
Overspecialization or lack of general
management

17. Product / Service Departmentation:-
•Grouping of activities &
departments formed are given name
on the basis of products
manufactured in an organization
•Applied where there is a large range
of products are manufactured
•Applied where there are several
product lines & functional
departments fails
CEO
HEAD TV
DIVISION
HEAD AC
&
REFIGRATION
HEAD
COMPUTER

18. Advantages:
 Ensures better
consumer services.
 Unprofitable products
may be easily
determined
 Assist in development of
all around managerial
talent
 Makes control effective
Disadvantages:
 Expensive as duplication
of service functions occurs
in various product
divisions
 Customers & dealers have
to deal with different
persons for complaints &
information of different
products

19. Region / Area Departmentation:-
Geographical regions are adopted
for main division as well as for
subdivision purposes
Territorial departmentation are
adopted when organizations
activities are physically dispersed
in different locations
Useful where business is on
international & national level
CEO
HEAD NORTH
ZONE
HEAD EAST
ZONE
HEAD WEST
ZONE
HEAD SOUTH
ZONE

20. Advantages:
 Cater to meet the needs
of local people more
satisfactorily
 It facilitates the effective
control
 Assists in development
of all- round managerial
skills
Disadvantages:
 Communication problem b/w
head office & regional office
due to lack of communication
at some places
 Coordination b/w various
divisions may become
difficult
 It leads to duplication of
activities which may cost
higher

21. Customer Departmentation:-
When departments are made
to cater different kind of
customers
Widely followed in subdividing
activities of the marketing
department
Helps in supplying good in
accordance with the peculiar
needs of customer
HEAD
MARKETING
HEAD
WHOLSALE
HEAD
RETAIL
HEAD
EXPORT

22. Advantages:
 It focused on customers
who are ultimate
suppliers of money
 Better service to
customer having
different needs & tastes
 Development in general
managerial skills
Disadvantages:
 Sales being the exclusive field
of its applications ,
coordination may appear
difficult b/w sales function &
other enterprise functions
 Specialized sales staff may
become idle with the
downward movement of
sales to any specified group
of customers

23. ANY QUERRIES…
An unexamined life is not worth living