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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Now think about it in terms of interdependencies. Rather than A a worker handling step 1, B handling step 2 and C handling step 3, A may carry out all the steps on product X, B carries out the same set of steps for product Y and Deparrmentation for product Z. This is possible through shift duties.

Departmentation (Grouping)

This is otherwise termed as divisionalisation because it divides the organization into different divisions or groups. It also facilitates recruitment and selection of top managers from within the organisation rather than depending on outside sources. The costs and revenues of all the products can be compared. Top management is relieved of operating task responsibility and can concentrate on such centralized activities as finance, research etc.

In the parallel process of departmentation, the number of steps to accomplish the task is the same. Secondly, a branch or an office is established in each geographical zone to manage local affairs of the company in that zone. Each department is headed by a person known as departmental manager. People working in one department are closely knitted and work collectively towards achievement of departmental goals. This ensures better performance of employees of each department.

Consumer department managers cannot easily frame policies for their departments because of changing consumer behaviour.

Departmentation is the foundation of organisation structure, that is, organisation structure depends upon departmentation. Bases Methods Types of Departmentalization Bases or methods or types of departmentalization are depicted in this image. This necessitates the introduction of departmentation.


People are placed in different departments according to their specialised skills. Though this reduces boredom on the work process, it requires trained workers who can carry out all the processes. By creating departments where each product department looks after one product or product deparmtentation only, decision-making, fixing responsibilities and assessment of performance can be done efficiently. One reason organizations exist is to do things that would be hard for one person to do by themselves.

For each process, departments are created and depatrmentation by people skilled and competent to separtmentation that process. He ensures that activities are performed strictly according to rules and procedures laid down for the department. The marketing department is further divided on the basis of product lines i. Such an organisation would become an inflexible organisation.

Creating departments focuses on departmental activities and facilitates co-ordination. A department created for satisfying customer lf becomes specialized in that area resulting in cost efficiency. How to write a circular letter announcing the opening of a new Regional office? Divisional structures are created on the basis of smaller divisions where each division has its own functional activities production, finance, personnel and marketing.

Functional departmentation is not suitable in such cases.

First, an entire area of operation e. Departmentation facilitates control by departmental manager over the activities of his department only.

The major functional departments further have derivative departments. Nature, Advantages and Demerits. Division of work into departments leads to specialisation as people of one department perform activities related to that department only. Managers are able to promote sales as they are aware of the local conditions of the area where they are operating. In a similar context, a small business or firm may operate only within city boundaries through its offices established in east zone, west zone, north zone and south zone of the city.

Notes on Departmentation: Meaning, Importance and Basis | Organisation

Bases of Departmentations The bases of departmentation vary from organization to organization as the nature of business differs. Each geographic unit has resources to cater to the needs of consumers of that area. The focus is on the product line and all functional activities associated with the product line. He depaetmentation adapt the organisation to its internal and external environment. Denotes the combined base departmentation. So at the next level up, we merge all of these under “Vice-President: This form of departmentation is suitable for medium and large-sized organisations where goods are produced through a series of operations.


This type of departmentation provide the benefits of both functional and product structures. Organisations which do not frequently change their work units and work force are suitable for creating departments on the basis of functional activities.

Groups formed in order to achieve economies of scale. ManagementProduction Planning.

This offers the benefits of specialisation; efficiency and speed. Baees same product may be of industrial use for one buyer and personal use for another. The departmental manager is accountable for functions performed by his department. In time departmentalization, departments are separated based on the division of their working time or job shifts.

What are the various bases of departmentation in an office ?

But the most commonly adopted bases of departmentation are:. The departmentatioon can also be unwitting victims of power struggles among the bosses. This is comparatively a costly basis of departmentation than functional departmentation because every department appoints people to look after specialised activities, like accounting, finance, marketing, personnel etc.

Activities are divided into smaller segments, standards of performance can be framed, factors affecting performance can be identified and control can be more objective in nature. Newer Posts Older Posts Home.