Scribd Logo
Upload

Welcome to Scribd!

  • 83 views

    Departmentation: Management Theory and Practice

    Uploaded by

    Vaishnavi Sasidharan
    This document discusses different types of departmentation in organizational structure. It defines departmentation as the grouping of common activities under single control. There are two broad forms of departmentation: functional and divisional. Functional departmentation groups activities by similarity of functions, while divisional departmentation divides the organization into smaller divisions with their own functional activities. Some common types of divisional departmentation discussed are product, process, customer, geographic, time-based, and size-based departmentation. The document outlines the key characteristics and merits and demerits of each departmentation approach.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd

    Departmentation: Management Theory and Practice

    Uploaded by

    Vaishnavi Sasidharan
    83 views18 pages
    This document discusses different types of departmentation in organizational structure. It defines departmentation as the grouping of common activities under single control. There are two broad forms of departmentation: functional and divisional. Functional departmentation groups activities by similarity of functions, while divisional departmentation divides the organization into smaller divisions with their own functional activities. Some common types of divisional departmentation discussed are product, process, customer, geographic, time-based, and size-based departmentation. The document outlines the key characteristics and merits and demerits of each departmentation approach.

    Original Title

    Mtp Presentation

    Copyright

    © © All Rights Reserved

    Available Formats

    PPTX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document discusses different types of departmentation in organizational structure. It defines departmentation as the grouping of common activities under single control. There are two broad forms of departmentation: functional and divisional. Functional departmentation groups activities by similarity of functions, while divisional departmentation divides the organization into smaller divisions with their own functional activities. Some common types of divisional departmentation discussed are product, process, customer, geographic, time-based, and size-based departmentation. The document outlines the key characteristics and merits and demerits of each departmentation approach.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    83 views18 pages

    Departmentation: Management Theory and Practice

    Uploaded by

    Vaishnavi Sasidharan
    This document discusses different types of departmentation in organizational structure. It defines departmentation as the grouping of common activities under single control. There are two broad forms of departmentation: functional and divisional. Functional departmentation groups activities by similarity of functions, while divisional departmentation divides the organization into smaller divisions with their own functional activities. Some common types of divisional departmentation discussed are product, process, customer, geographic, time-based, and size-based departmentation. The document outlines the key characteristics and merits and demerits of each departmentation approach.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 18

    DEPARTMENTATION

    MANAGEMENT THEORY AND PRACTICE


    INTRODUCTION
    ORGANISING
    • It refers to the relationship between people, work and resources used to achieve the common objectives or goals.

    STEPS IN THE PROCESS OF ORGANISING


    • Identification and division of work
    • Departmentation
    • Assignment of duties
    • Establishing reporting relationships
    Meaning of Departmentation

    • Departmentation is a part of the organisation process. It involves


    the grouping of common activities under a single person’s control.
    • Departmentationon is the foundation of organisation structure,
    that is, organisation structure depends upon departmentation.
    Departmentation means division of work into smaller units and
    their re-grouping into bigger units (departments) on the basis of
    similarity of features.
    • Each department is headed by a person known as departmental
    manager. 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.
    Importance of Departmentation
    1. Organisation structure
    2.  Flexibility
    3. Specialisation
    4. Sharing of resources
    5. Responsibility
    Basis of Departmentation
    There are two broad forms of departmentation they are:
    1. Functional departmentation.
    2. Divisional departmentation.
    1. Functional Departmentation
    •  It is grouping of activities on the basis of similarities of functions.
    • The nature of activities performed by different organisations is different.
    For example, activities carried by a manufacturing organisation are
    production, finance, personnel and sales. For a trader, the major activities
    are buying and selling, a bank performs borrowing and lending functions. 
    • The major functional departments further have derivative departments.
    Production department, for example, has sub-departments to manage
    purchase, production planning and control, manufacturing etc.
    Merits of Functional Departmentation
    1. Simple and logical basis of creating departments
    2. Specialisation
    3. Co-ordination
    4. Supervision
    5. Suitable for stable and small organisations

    Demerits of Functional Departmentation


    1. Overall organisational goals
    2. Delayed decisions
    3. Unsuitable for dynamic organisations
    2.Divisional Departmentation

    Divisional structures are created on the basis of smaller divisions


    where each division has its own functional activities (production,
    finance, personnel and marketing).Major divisions that determine
    the organisation structure are :
    1. Product Departmentation
    2. Process Departmentation
    3. Customer Departmentation
    4. Geographic Departmentation
    5. Departmentation by Time
    6. Departmentation by Size
    1. Product Departmentation
    • This form of departmentation is suitable for companies that produce
    multiple products. Product departmentation is grouping of jobs and
    resources around the products or product lines that a company sells.
    • The focus is on the product line and all functional activities associated with
    the product line. Departments are created on the basis of products and
    product manager has the authority to carry out functional activities for his
    department. 
    Merits of Product Departmentation
    • 1. Better performance
    • 2. Fast decisions
    • 3. Co-ordination
    • 5. Responsibility
    • 6. Efficiency
    Demerits of Product Departmentation
    • 1.  Co-ordination
    • 2. Expensive
    2. Process Departmentation
    • In manufacturing organisations where the product passes through
    different stages of production, each stage is designated as a process and
    department is created for each process. It is called process
    departmentation.
    • Manufacturing paper, for example, requires processes like crushing the
    bamboo, making pulp, purifying the pulp, making paper rolls, and cutting
    it into rims.
    • For each process, departments are created and headed by people skilled
    and competent to carry that process.
    Merits of Process Departmentation
    1. Specialisation
    2. Economic considerations
    3. Technological consideration
    4. Facilitates training

    Demerits of Process Departmentation


    5. Co-ordination
    6. Boredom
    3. Customer Departmentation
    • When organisations sell goods to customers with different needs, departments
    on the basis of customers is the suitable form of departmentation
    • It is “the organising of jobs and resources in such a way that each department can
    carefully understand and respond to different needs of specific customer groups”.
    • Clear identification of customers and their needs is the basis of customer
    departmentation. This method of departmentation can be followed only in
    marketing division.eg lending company
    Merits of Customer Departmentation
    1. Competitive advantage
    2. Customer orientation

    Demerits of Customer Departmentation


    3.  Co-ordination
    4. Identification of consumer groups
    5. Change in consumer behaviour
    4.Geographic Departmentation
    • In Geographical departmentation, organisation creates departments:
    (i) Close to its customers because they are geographically dispersed over different areas, or (ii) Near
    the sources of deposits.
    • Each geographic unit has resources to cater to the needs of consumers of that area. 
    • General Manager of every department looks after functional activities of his geographical
    area but overall functional managers provide supporting services to the managers of
    different areas.
    Merits of Geographic Departmentation
    1. Training and development
    2. Customer orientation
    3.  Low cost of production
    4. Communication

    Demerits of Geographic Departmentation


    5. Co-ordination and control
    6. Expensive
    7. Managerial skills
    5. Departmentation by Time
    • This method of departmentation is used in situations
    where work is done round the clock
    • In this type of departmentalization, decisions are made fast,
    because the decisions are made at a point near the operation. 
    • The major disadvantages of these decisions is the duplication of
    work, since each division will have its own staff and specialists.
    6. Departmentation by Size
    • This method is followed in army where number of workers in
    the unit is important.
    • The company’s performance is judged by the number of people
    working with it, and therefore, it adopts departmentation by
    size.
    • Departments are created on the basis of number of people who
    form the department.
    • Soldiers in army are grouped in numbers to form departments.
    THANK YOU

    You might also like