Departmentation

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

1. Departmentation …learning never ends          the journey of excellence  always continues… 

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. D efinition : 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. T here 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 F unction Departmentation by Product or S ervice 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

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

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

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

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

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