Departmentation

Grouping of activities is an essential step in designing organizational structure. Grouping of activities into departments, divisions or other homogeneous units is termed as departmentation . It is the process of grouping of tasks into jobs, the combining of jobs into effective work groups and the combining of groups into identifiable segments or departments.

Need and Advantages of Departmentation

The departmentation aims at

i. Specialization of activities for efficient performance

ii. Simplifying the task of management within a workable span

iii. Maintaining Co-ordination and control of the various activities.

The main advantages can be summed up as;

Departmentation facilitates the top management to concentrate on important managerial functions. It will improve efficiency in management, fixation of accountability, specialization, expansion, autonomy, and better control.

Process Involved in Departmentation

The various steps involved in departmentation are:

i. to identify task or duties ;

ii. to analyze details of each task ;

iii. to describe the functions or to group similar activities ;

iv. to entrust the grouped activities to departmental heads ; and

v. to define the authority and responsibility of departmental heads.

Dangers of Departmentation

Although departmentation is very essential for the efficient running and control of a business, there are a few dangers of departmentation which should be taken care of while assigning and grouping of activities.

1. Dividing the business house into various departments makes the co-ordination of various activities very difficult. To achieve individual efficiency , one department may work against the interest of another department thus reduces the overall profitability of the business as a whole.

2. Departmentation will create difficulty in communication between other departments and makes planning and control more difficult

3. Departmentation increases the levels of management and creates more gap between top management and workers.

Factors influencing Assigning of Activities

The following factors are to be taken into consideration while assigning activities into departments:
1. Specialization: While assigning activities into departments care must be taken to ensure that the benefits of specialization are achieved.

2. Control: One of the primary aims of departmentation is to facilitate control. Departments should be so created as to fix clear responsibilities for enabling effective control.

3. Co-ordination: There should be some agency to co-ordinate the activities of various departments. A central body should act as a co-ordinating body.

4. Key Activities: There are certain activities which are very crucial. Such activities should be placed in separate division.

5. Emphasis on Local Conditions: While assigning activities proper emphasis should be given to local conditions at the places concerned like the personality of the individuals who may be given the responsibilities, the attitude of the people etc.

6 Economy: Another important factor to be considered while creating separate departments is the expense involved and economy in its operations.

Methods or Basis of Departmentation

1. Departmentation By Function : Under this method departments are created on the basis of specific functions to be performed.(Eg: Finance department, Production dept. etc)
2. Product wise Departmentaion: In this method every major product is organized as a separate department. This type of departmentation is followed in large scale organization. (Eg: Metal division, Plastic Division etc)
3. Customer wise Departmentation: A business concern provides specialized services to different classes of customers through different departments.(Eg: Services provided to whole salers, retailers etc.
4. Departmentation by Territory or Geographical Departmentation: Territorial departmentation is very useful to large scale enterprises whose activities are geographically spread over a wider area.( Eg: Northern Region, Southern Region)
5. Departmentation by Process or Equipment: In this method activities are grouped on the basis of production processes or equipment involved. This is generally used in manufacturing enterprises and at lower level organizations. (Eg:A printing press may consist of composing, proof reading, printing , and binding departmentation )
6. Composite or combined Departments : Big enterprises follow a composite or combination of several methods. Usually functional departmentation is used at top level while product or territorial departmentation is used for sales department.
7. Departmentaion by Time : It consists of grouping the activities on the basis of time of their performance (Eg: A factory operating on twenty four hours may hav three departments each for morning , day and night shifts)
8. Departmentation by Number: under this method activities are grouped on the basis of by certain number of persons. (Eg: In army, soldiers are grouped into Battalion, Company, and Regiment etc.)