Definition, Meaning and Bases of Departmentation such as Functional, Territorial, Process, Product, Customer, Time, their merits & demerits are explained in this. The question arises: On what basis should we carve up the members of the organization Here are six common bases for departmentation. Departmentation: Meaning and Bases | Organisation Process. Article shared by: After reading this article you will learn about Departmentation: 1. Meaning of.

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Bses department creates departments to look into capital budgeting fixed assets and current assets, cash management and budgets.

Similarly, funds required for each product line are different.

Since finished product goes through different processes, each process is assigned to a different department. For example, shifts in a factory or hospital or hotel.

There are four kinds of increasingly tight interdependence: Water-tight compartments are sometimes created amongst departments as people show loyalty towards their departmental managers. This network of authority- responsibility relationships is the basis of designing a sound organisation structure.

For example, activities carried by a manufacturing organisation are production, finance, personnel and sales. Bases Methods Types of Departmentalization Bases or methods or types of departmentalization are depicted in this image.

The matrix form works best when one dimension is a permanent affiliation typically functionaland the other is a temporary dimension, such as a client project. Here, every individual department is responsible for producing and selling the type of product assigned to them. As this is a suitable form of departmentation for stable organisations, organisations operating in the dynamic environment do not accept functional activities as the basis of departmentation.

Functional organisation creates departments along activities or functions of the undertaking functions do not refer to managerial functions of planning, organisingstaffing, directing and controlling.

The next tightest interdependencies are the sequential interdependencies between fabrication and assembly, since first you make the materials, then you assemble them. Reynolds project, and so on. Depending on how many people there are in the organization, the coordinators themselves need to be organized into groups supervised by higher level managers, and so on. Departmentation enables departmental heads to be creative in making decisions with respect to their departmental activities.


6 Different Basis of Departmentation in an Organisation

Departmentation by Function 2. There are opportunities to improve performance in their area of specialisation. It is rather difficult to set up specific accountability and profit centres within functional departments so the performance is not accurately measured. Subordinates are trained to carry out functions related to each product. Home Disclaimer Privacy Contact.

6 Different Basis of Departmentation in an Organisation

In other words, the positions have really nothing to do with each other, they are only interdependent in the general sense of being part of the same company, so they are funded by the same budget. For example, in practice, owing to departmentatkon market competition and emerging complexity of tasks most organizations often uses a combination of above-discussed see point no. Conflicts may arise among managers of different processes, particularly when they loose sight of the overall company goals.

Priorities are set and resources are allocated according to the need, importance and urgency regarding their use by different departments. Personnel department has sub-departments to take care of appointments, training, placement and promotion of employees.

Demand for the same product for same set of consumers differs during different times. One way to solve these problems is to create a hierarchical system of supervision, so that small groups of workers up to say, 50 people are supervised by coordinators managers.

It provides an opportunity to a regional manager to gain broad experience as he looks after the complete operation in a particular territory. Similarly, Post Offices are often divided by regions and zipcodes. All functions related to particular product are bought together under the umbrella of product manager.


However, coordinating, controlling and just keeping track of a lot of individuals introduces its own problems. For example, if each department in a factory has a maintenance person, it may be inefficient because the small departments don’t have quite enough work for a fulltime maintenance person, while the big departments have too much. It is not easy to identify various consumer groups. This promotes product specialisation which helps in product growth. When organisation has a number of projects, it forms task forces which consist of people from different units having different skills to complete those projects.

Works well with smaller organizations Groups skill sets so they can consult with each other and socialize each other: Here the activities are grouped on the basis of produce or product lines.

What are the various bases of departmentation in an office ?

All the primary and auxiliary activities are managed by one manager. In process departmentalization, departments are separated based on their role in a production process. Creating departments and departmental heads makes an organisation flexible and depatrmentation to environment.

Since decisions are made by departmental heads for their respective departments, it may delay decision-making for the organisation as a whole. If planned deparmentation is not achieved, the department responsible becomes answerable.

Step 1, Step 2, and Step 3. Here’s how the seven categories above fall into the two supercategories, along with some other information about the two categories:. Advertising department departmentaton of marketing departmentfor example, can further have sub-departments like advertising in Newspapers, Radio, TV etc. Here are six common bases for departmentation: This ensures better performance of employees of each department. In geographic departmentalization, separate departments are made based on the company’s i.