Departmentation is part of the organizational process. It involves grouping of common activities on the basis of function of an organization under a single person’s control.
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2. Welingkar’s Distance Learning Division
Introduction
Departmentation is a part of the organization
process. It involves the grouping of common
activities on the basis of a function of the
organization under a single person’s control.
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3. Welingkar’s Distance Learning Division
Does water flowing in a
distant mountain think
about its distance from
the ocean?
The distance between my
current position and my
desired goals is very big.
But I shall
reach my goals.
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4. Welingkar’s Distance Learning Division
Meaning
Departmentation means the process by which
similar activities of the business are grouped
into units for the purpose of facilitation
smooth administration at all levels.
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5. Welingkar’s Distance Learning Division
Definition
Departmentation refers to the classification of
activities on operations of an undertaking into
functionalized categories. It is created in
product wise, process-wise or area wise. It
ensures proper direction to and control on
them.
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6. Welingkar’s Distance Learning Division
Process of Departmentation
Identification of Fixing the scope of
Work authority and
responsibility of the
departmental heads
Analysis of details
Of each work
Entrusting the function
Description of the to a separate person
function of the who has specialized
organization. in the respective field.
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7. Welingkar’s Distance Learning Division
Need and Importance of Departmentation
It increases the operating efficiency of the employees.
It makes the executive to be alert and efficient in his
duties.
It increases the prestige and skill of the departmental
heads.
It makes the departmental heads efficient.
Further expansion of the organization is possible.
It gives advantages like facilitating budget preparation,
effective control of expenditure, attaining specialization,
better coordination etc.
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Areas of Forecasting
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control
Coordination
Securing
attention
Recognition of
local conditions
Economy
Specification
DEPARTMENTATION
9. Welingkar’s Distance Learning Division
Basis of Grouping Diverse Activities
Maximum Use Proper attention
Coordination Seperation
Interest Policy matter
Competition
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10. Welingkar’s Distance Learning Division
Basis pattern types of Departmentation
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
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11. Welingkar’s Distance Learning Division
Deparmentation by Function
Advantages:
It is scientific and time tested method.
It follows the principles of specialization and division of
labour
Ensures performance control
Preserves the importance of each of activities.
Due weightage and prestige are given to managers and
respected
Facilitates coordination activity within departments
Economical, simple and easy to understand
Helps utilization of manpower and other natural resources
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12. Welingkar’s Distance Learning Division
Departmentation by Function
Disadvantages:
It makes management control work more difficult
Increases work load and responsibility of
managers
Does not offer scope for training for overall
development of managers
Managers may be experts but may not
understand the problems of other departments.
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13. Welingkar’s Distance Learning Division
Departmentation by Product or Service
Advantages:
Maximum utilization of personnel efficiency of
workers.
Gaining economy in manufacturing and marketing of
products
Better services to customers
Profitability of each product is known.
Proper attention is given
New line of product can be introduced without
difficulty
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14. Welingkar’s Distance Learning Division
Departmentation by Product or Service
Disadvantages:
Danger of duplication of work
Increases number of personnel that leads to
heavy cost
Additional cost for maintaining a sales force for
each product
Control becomes more difficult
Machines and equipment may not be used fully.
Only for large scale diversified groups
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15. Welingkar’s Distance Learning Division
Departmentation by region or area
Advantages:
Effective span of control.
Reduces the cost of operation and gains saving in time.
Intimate knowledge about the taste and preference of
customers Win the confidence of customers and reduce
the competition
Profitability of each area can be known.
Gives opportunities to managers to improve their skills
More suitable for large scale business unit
Control process very easy to manager
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16. Welingkar’s Distance Learning Division
Departmentation by region or area
Disadvantages:
Increases number of personnel and heavy cost
of operation
Control of head office is less effective one
Involves duplication of work
Small business can’t manage the high cost.
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17. Welingkar’s Distance Learning Division
Departmentation by Customers
Advantages:
It fulfills the expectations and needs of
customers
It develops specialization among the
organizational staff.
Out of fashion products can be dispensed
with
Each section of customers gets better
services.
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18. Welingkar’s Distance Learning Division
Departmentation by Customers
Disadvantages:
Duplication of activities.
Achievement of coordination is very difficult
Wastage of available of resources and
facilities.
Production activities can’t be done under this
method due to heavy cost
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19. Welingkar’s Distance Learning Division
Departmentation by Process
Advantages:
Costlier machines can be used effectively.
Economy of operation
No duplication of activities
Principle of specialization and division of labour is
followed
It helps top management to have effective
performance control
This is more suitable for a product manufacturing
passes through more processes.
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20. Welingkar’s Distance Learning Division
Departmentation by Process
Disadvantages:
Heavy cost of operation
More specialist are essential to each process
Lack of overall development of managerial
talents
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21. Welingkar’s Distance Learning Division
Departmentation by Time
The business activities are grouped together
on the basis of the time of the performance.
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22. Welingkar’s Distance Learning Division
Departmentation by Numbers
Similar type of duties performed by small
groups and each group is controlled by a
supervisor or an executive. The principles of
span of management span of control or span
of supervision is used under this type. E.g.
Squads, battalions, companies, brigades and
regiments in Army
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23. Welingkar’s Distance Learning Division
Departmentation by Marketing Channels
This type of departmentation is adopted on
the basis of the channel of distribution chosen
by the particular business unit. This method
of departmentation has grown in importance
as business has become increasingly market
oriented
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