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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Departmentatiion is depaftmentation for organisations which are engaged in the manufacture of products which involves several processes. They can directly communicate with the consumers and frame policies to satisfy their needs. After reading this article you will learn about: To give the attention to heterogeneous groups of buyers in the market, marketing activities are often split into various several deparfmentation.

This develops their potential to be promoted to higher managerial positions in the organisation. Output of one process department is input of the other. Since workers in one functional area focus on that area only, they acquire expertise and specialised skills in performing their duties.

If there are no departments, organisational resources; physical, financial and human, will be commonly shared by different work units. Grouping by the basic function in the organization: For instance, if product C is a car, the department can be branched out for commercial car, luxury car, special utility vehicle etc.

It is not easy to identify various consumer groups. It is called process departmentation. For example, if the product does not earn profits, top managers cannot say with assertion whether the problem lies with production department or sales department.


Best example of process departmentalization can be seen in a textile mill where we may have a spinning department, weaving department, dyeing department, printing department, etc.

Subordinates are trained to carry out functions related to each product. 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.

For example, a print shop may have separate letterpress and offset departments — two different processes for getting the same outputs. This refers to consultations among people about how to do things. Departments are created for each shift though the objectives and nature of work carried in all the departments is the same. He cannot adapt the organisation to its internal and external environment.

Grouping based on the products or services that the employee works on. Manufacturing paper, for example, requires processes like crushing the bamboo, making pulp, purifying the pulp, making paper rolls, and cutting it into rims.

Bases Methods Types of Departmentalization

This method of departmentalization is generally used in schools and colleges for making division of classes. When organisations sell to customers with different departmentaton, departments are created on the basis of customers. Can create significant duplication of effort and knowledge throughout org. Within the office the departmentation may takes place on functional basis like typing department and filing department. Each geographic unit has resources to cater vepartmentation the needs of consumers of that area.


As work is divided into different processes, the process manager and his team specialise in that process by constantly carrying out activities related to that process only. Often, it is the underlying technology depagtmentation determines the departmentation.

Departmentation enables departmental heads to be creative in making decisions with respect to their departmental activities.

Sales people understand consumer behaviour and provide them the desired services. Policy framers are at the head quarters and policy executors are at the regional offices.

The departmentation by process can be shown as Fig 6. Before adopting this basis of departmentation, therefore, benefits must be weighed against costs. For example, a job requires three steps for its completion.

Though this reduces boredom on the work process, it requires trained workers who can carry out all the processes. Creating departments focuses on departmental activities and facilitates co-ordination. Water-tight compartments are sometimes created amongst departments as people show loyalty towards their departmental managers.

A department created for satisfying customer requirements becomes specialized in that area resulting in cost efficiency.

Departmentation (Grouping)

The sales people belong to local areas of operation. Process departmentation is found in chemical industries and composite textile mills.

Above this level, most of the workflow interdependencies are only of the pooled variety: