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Presentation On Departmentation

The document discusses different methods of departmentation, or dividing organizational activities into departments or units. It describes 7 types of departmentation including functional, product, territorial, customer, process, time, and composite. Functional departmentation groups activities by major functions like production, sales, finance. Product departmentation groups activities for each major product. Territorial divides activities geographically. Customer departmentation groups activities by type of customer. Process departmentation divides by production process or equipment. Time departmentation groups activities by work shifts. Composite uses multiple bases.

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harshita
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430 views17 pages

Presentation On Departmentation

The document discusses different methods of departmentation, or dividing organizational activities into departments or units. It describes 7 types of departmentation including functional, product, territorial, customer, process, time, and composite. Functional departmentation groups activities by major functions like production, sales, finance. Product departmentation groups activities for each major product. Territorial divides activities geographically. Customer departmentation groups activities by type of customer. Process departmentation divides by production process or equipment. Time departmentation groups activities by work shifts. Composite uses multiple bases.

Uploaded by

harshita
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Presentation on

Departmentation

Meaning of
Departmentation
Departmentation implies the division of the
total works of an enterprise into individual
functions and sub-functions.
Grouping of activities into departments,
divisions or other homogeneous units is
known as departmentation.

Need & Importance of


Departmentation

Specialisation- departmentation enables an organisation to avail of the


benefits of specialization .

Expansion- one manager can supervise and direct only a few


subordinates. Grouping of activities and personnel into departments
makes it posssible for the enterprise to expand and grow.

Autonomy- department results in the division of the enterprise into


semi-autonomous units. The managers of
these units are given
adequate freedom. It provides job satisfaction and motivation.

Appraisal

Fixation of responsibility

Management development

Administrative control

Types of Departmentation
1.
2.
3.
4.
5.
6.
7.

Departmentation of functions
Departmentation by products
Departmentation by territory
Departmentation by customer
Departmentation by process or equipment
Departmentation by time and numbers
Composite departmentation

Functional
Departmentation
In functional departmentation each major or basic
function is organized as a separate department.
Production, sales, financing and personnel are
basic functions in a manufacturing enterprise. In
other hand in a retail store buying, selling and
finance are the major functions.

Advantages and
Disadvantages
1.

2.

3.

4.

5.

It is the most logical, time


proven & natural form of
departmentation.
It facilitates delegation of
authority.
It ensure the performance of
all the activities.
It
eliminates
costly
duplication of effort.
It
provides occupational
specialisation which makes
optimum
utilisation
of
manpower.

1.
2.

3.

4.

There is too much emphasis


on specialisation
There may
be conflict
between departments as
the
responsbilities
are
interdependent.
Functional
departments
may grow in size to justify
their costs.
There may be difficulties in
coordinating the activities
of different departments.

Product Departmentaion
In product or service departmentaion, every
major products is organized as a separate
department. Each department looks after the
production, sales and finance of one product.

Advantages:
1.

2.

3.

Product departmentation can reduce the


problem of coordination between production
and sales activities.
The performance of each product division
and its contribution to overall results can be
easily evaluated.
It is more flexible and adaptable to change.

Disadvantages:1.

2.

3.

4.

5.

There is duplication of physical facilities and


functions.
More persons with general management
ability are required.
Each product manager asserts his autonomy
disregarding the interests of the organization.
It creates the problem of effective control over
product division by the top management.
There may be underutilization of plant
capacity when the demand for a particular
product is not adequate.

Territorial
Departmentation
Territorial departmentation is related to a
large scale enterprise whose activities are
geographically spread over a wide area. For
example banks, insurance companies,
transport companies distribution agencies.
Board of
directors
Managing
director

Northern
region

Western
region
Branch 1

Central
region
Branch 2

Eastern
region
branch3

Southern
region

Advantage and
Disadvantage
1.

2.

3.

4.

It helps in achieving the


benefits of local operations.
It results in savings in
freight, rents and labour
costs.
It facilitates the expansion
of business to various
regions.
Every regional manager
can
specialise
in
the
peculiar problems of his
region .

1.

2.

3.

There may be friction


between
regional
managers.
All activities of a firm
may not be amenable to
territtorial
specialisation.
Coordination and control
of different branches
from the head office
become less effective.

Customer Departmentation
In this departmentation, the activities are
grouped according to the type of customers.
This type of departmentation is useful for
banks, departmental stores etc. which sell a
product of service to a number of distinct
and clearly defined customer groups.
Board of directors
Managing Director

Finance

Marketing

wholesale

Production

Exports

Personnel

Retail

Advantages and
Disadvantages
1.

2.

3.

Special attention can be


given to the particular
tastes and preferences of
each class of customers.
The
benefits
of
specialization can be
derived.
The
enterprise
gains
intimate knowledge of
the
needs
of
each
category of customers.

1.

2.

3.

As such departmentation is
applied only
to sales
function, there may be
difficulties in coordinating
the activities of different
functions.
It may lead to duplication
of activities and heavy
overloads.
Managers
of
customers
departmentation may put
pressures
for
special
facilities and benefits.

Process or Equipment
Departmentation
This is the departmentation in which
activities are grouped on the basis of
production process or equipment involved.
This is generally used in a manufacturing
enterprise
and
at
lower
level
of
organization.
For example a textile mill may be organized
into ginning, spinning, weaving and dyeing
departments

Advantages and
Disadvantages
1.

2.

3.

There
is
clear
cut
technical
division
of
work.
This
ensures
specialization
and
facilitates
training
of
juniors executives.
It is possible to appoint
persons
with
special
education
and
experience
for
each
process

1.

2.

3.

There
may
be
difficulties
in
coordinating different
process departments
Conflict
among
managers of different
process may arise.
It is suitable only for
special and composite
type of plants.

Time Departmentation
Under this basis, activities are grouped on
the basis of the time of their performance.
For example a factory operating 24 hours
may have three departments. One each for
morning, day and night shifts.
The idea is to obtain the advantages of
people specialized to work in a particular
shift.

Composite
Departmentation
Managing Director
Marketing
Manager

Works Manager

Industrial
Supplies
division

Consumer
Product division

Domestic sales
manager

Private Buyers

Finance Manager

Export sales
manager

Government
Agencies

Thank you

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