Departmentation in Organisations

Departmentation in Organisations

This post is about how organisations go about departmentation. Departmentation is the process of grouping the activities into one unit. It implies the division of total work of an enterprise into individual functions and sub functions. It provides the growth and specialization in an organization for the efficient achievement of goals.

Patterns in Departmentation

There are several patterns that are developed for departmentation in the business world. But the most common are

• Departmentation by Functions
• Departmentation by Products
• Departmentation by Locations or Territories
• Departmentation by Time
• Departmentation by Process
• Departmentation by Customers

Departmentation by Functions

It refers to grouping of all the activities on the basis of functions. Basic aim of function departmentation is to simplify the work as all the work is grouped in major functional department. The basic functions are production, finance, marketing etc.

Departmentation by functions may be classified as

Minor Functional Department: It includes those departments that are important for the organization but do not give major contribution.

Major Functional Department: Department that carry basic activities of the enterprise is known as major functional department.

Derivative Functional Department: It is created when manager wants to reduce its span of management. Expansion of activities needs to divide the work in other department and that department is known as derivative functional departmentation.

Principles of Departmentation

Following are some of the basic principles for departmentation in organisations.

Principle of specialization:
Principle of specialization must be followed while adopting the method of departmentation. Duties should be assigned according to the abilities of managers so that they can perform efficiently.

Principle of control:
To maintain the proper control on the workers, it is necessary to that duties must be clearly defined and has proper lines of communication. Evaluation of the workers should be done at regular intervals.

Principle of coordination:
Before adopting any method of departmentation, it is necessary to check that proper coordination must be maintained between different departments. This can be achieved by grouping same activities under one department.

Principle of economy:

Activities of the organization must be grouped in such a manner that it will contribute majorly with the least cost. This will help in bringing economy in the organization and optimum utilization of resources.

Principle of social aspect:
Human and social aspect must be fully considered while taking the decisions to create the department. Local circumstances must also keep in mind while making departmentation.