DEFINITION Departmentation can be defined as the process

DEFINITION : �Departmentation can be defined as the process by which activities or functions of enterprise are grouped homogeneously into different groups. �The administrative units are called divisions, units or departments.

PROCESS OF DEPARTMENTATION �TOP LEVEL – PRIMARY DEPARTMENTATION �MIDDLE LEVEL- INTERMEDIATE DEPARTMENTATION �LOWER LEVEL- ULTIMATE DEPARTMENTATION OR SECONDARY DEPARTMENTATION

VARIOUS STEPS INVOLVED IN DEPARTMENTATION ARE: Ø To identify task or duties. Ø To analyze details of each trade. Ø To describe the functions or to group similar activities. Ø To entrust the grouped activities into departmental heads. Ø To define the authority and responsibilty of departmental heads.

NEED OF DEPARTMENTATION v. SPECIALIZATION v. FIXATION OF RESPONSIBILITY v. FACILITIES APPRAISAL v. FEELING OF AUTONOMY v. DEVELOPMENT OF MANAGERS v. EXPANSION

DANGERS OF DEPARTMENTATION q. MAKES COORDINATION DIFFICULT…. q. DIFFICULTY IN COMMUNICATION…. q. CREATES GAP BETWEEN TOP MANAGEMENT AND WORKERS….

TYPES OF DEPARTMENTATION �Functional departmentation �Territorial or geographical departmentation �Productwise departmentation �Customerwise departmentation �Processwise departmentation �Timewise departmentation

Functional departmentation � Grouping the activities of an enterprise in accordance with the functions to be performed is known as functional departmentation.

President Asst. to President Marketing Market research Marketing planning Advertising and promotion Sale administration Sales Engineering administration Preliminary design Electrical engineering Mechanical engineering Personnel Production planning Financial planning Industrial engineering Budgets Production engineering Purchasing Hydraulic engineering Tooling Packaging General production Quality control Finance General accounting Cost accounting Statistics and data processing

Advantages. . �Simple and logical �High degree of centralisation �Eliminates duplication of activities �Facilitates delegation of authority �Facilitates coordination

Disadvantages… �Lead to internal frictions �Leads to excessive centralisation �Delay in decision making

Productwise departmentation �In a large sized diversified enterprise grouping the activities on the basis of product or product line is found to be very useful for effective administration and increased efficiency.

President Marketing Personnel Instrument division Indicator lights division Engineering Accounting Production Purchasing Finance Industrial tools division Electronic meter division Engineering Accounting Sales Production Sales

Advantages… �Better customer service. . �Solves coordination problems. . �Flexible. .

Disadvantages… �Expensive. . �More persons are required. .

Territorial or geographical departmentation �An enterprise having its operations spread over wide geographic area may go for departmentation on the basis of territory.

President Marketing Western region Personnel Southwest region Purchasing Central region Southeast region Finance Eastern region Personnel Engineering Production Accounting Sales

Advantages. . �Enables to cater to needs of local people. �Facilitates effective control.

Disadvantages. . �Expensive method �Leads to duplication of activities �Coordination may become difficult

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