DEPARTMENTALIZATION Aby Abdul Rabb, Nagercoil, India M.Com.,M.L.M., M.B.A.,M.Phil (Com) ***********************************************************
I.
INTRODUCTION Departmentalization or departmentation is a part of the organization process. It involves the
grouping of common activities on the basis of a function of the organization under a single person’s control. A department is a unique group of resources established by management. 1. Meaning:
Departmentalization means the process by which similar activities of the business are grouped into units for the purpose of facilitation smooth administration at all levels. In short, it means grouping activities and people into departments. 2. Definition:
Departmentalization the grouping of related functions into manageable units to achieve the objectives of the enterprise in the most efficient and effective manner. Departmentalization refers to the classification of activities on operations of an undertaking into functionalized categories.
II.
NEED FOR DEPARTMENTALIZA DEPARTMENTALIZATION TION
1. It groups people or activities into a department to achieve organization’s objectives. 2. It facilitates staffing, directing, communicating, control and co-ordination. 3.
It helps managers to easily spot the source of information, skills and competencies to make decision.
4. It contributes to the success of organization and makes the departmental heads efficient.
III.
TYPES OF DEPARTMENTALIZ DEPARTMENTALIZATION ATION The departmentalization is divided into eight categories such as:
1. Numbers Departmentalization:
This method is used to group activities on the basis of a certain number of persons. This method is best suited to army. Under this method similar type of duties is performed by small groups and each group is controlled by a supervisor or an executive. E.g. Squads, battalions, companies, brigades and regiments In Army.
1
Army
Squads
Battalions
Companies
Brigades
Regiments
2. Time Departmentalization:
Under this method of departmentalization activities are grouped together on the basis of the time of the performance. This method is most suited to hospitals and other health care facilities where the round the clock patient care is essential. E.g. hospitals and other care facilities A . M er it of ti me departmentali departmentali zation
1. Services can be reentered round the clock. 2. It is possible to use processes that required uninterrupted continuing c ycle. 3. Expensive equipment can be used continuous B . De- M er it of ti me departmentali departmentali zation
1. Supervision may be lacking during the night shift. 2. Employees engaged in day and night shifts may suffer from fatigue. 3. Shift causes problem of co-ordination and communication. 4. Paying overtime may result increase in product or service cost 3. Functional Departmentalization:
It is the most logical, widely used and basic form of departmentalization. Under this method activities are grouped on the basis of the functions of enterprises. The basic functions are production, selling and financing. This method is universally popular. A . Advantages Advantages of F un ctional D epartmentali zation
1. It is scientific and time tested method. 2. It follows the principles of specialization and division of labour. 3. It ensures performance control and it preserves the importance o f each of activities. 4. Due weightage and prestige are given to managers and respected. B . Di sadvantage advantages s of F un ctional D epartmentali zation
1. It makes management control work more difficult. 2. Increases work load and responsibility of managers. 3. Does not offer scope for training for overall development of managers. 2
4. It extremely difficult to achieve co-ordination among the specialized departments. 5. It does not encourage innovation.
4. Territorial Departmentalization:
Department organized on the basis of geographical area is known as territorial departmentalization. This kind of departmentalization is best suited to large- scale enterprises whose business activities are geographically dispersed. E.g. Indian railways are the best example for territorial departmentalization. It is departmentalized into Northern, Southern, Eastern, central, south central etc.
Territorial Departmentalization Departmentalization
Southern
Northern
Eastern
Central
South central
A . Advantages of T err itor ial Departme Departmentali ntali zation
1. Maximum utilization of personnel efficiency of workers. 2. Gaining economy in manufacturing and marketing of products. 3. It place responsibility at lower level. 4. It enables managers to pay special attention to the needs, requirements and problem of local market. 5. It improve face- to- face communication with local p eople. 6. It provides better services to customers. B . Di sadvantage advantages s of Terr itor ial Departm Departm ental ization
1. It needs more persons with general managerial abilities. 2. It increases the problem of control by the headquarters. 3. It is difficult to monitor the activities of the departments spread over a vast area. 4. It gives rise to problem of communication. 5. Administrative expenses are bound to increase, since the division will have its own staff and specialists. 5. Customer Departmentalization:
Under this method of departmentalization activities are grouped on the basis of customers’ interest. It is customer centered. It is assumed that major customers can be identified and divided into logical categories such as agriculturists, traders, industrialist, professionals etc.
3
Customers Departmentalization Departmentalization of a University
Regular Courses
Evening courses
Open University
Distance Education
A . Advant ages ages of Customer Customer Departm entali nt ali zati on
1. It fulfills the expectations and needs of customers. 2. It develops specialization among the organizational staff. 3. Each section of customers gets better services. 4. It helps the enterprises to earn the esteem support and goodwill of the major customers. B . Di sadvantages of Customer Depar Departmental tmental ization
1. Duplication of activities and achievement of coo rdination is very difficult. 2. Wastage of available of resources and facilities. 3. Production activities can’t be done under this method due to heavy cost. 4. It discriminate rich customers from poor customers and encourage unhealthy competition. 6. Process Departmentalization:
Grouping activities on the basis of product or service or customer flow. Because each process requires different skills, process departmentalization allows homogenous activities to be categorized. It is grouping of activities under around production process. Different processes are converted
to
the
different
departments
in
this
type
of
the
departmentalization.
Process departmentalization of manufacturing industry Drilling
Grinding
Welding
Assembling
Shaping
Finishing
A . Advant ages ages of Pr oces ocess Departm entali nt ali zation ati on
1. It is supremely suited for manufacturing firms. 2. It enables the enterprises to reap the benefits of specialization, optimum maintenance of equipment and resources. 3. Costlier machines can be used effectively. 4. Economy of operation and no duplication of activities. 5. Principle of specialization and division of labur is followed. B . Di sadvantages of Proce Pr oces ss depart depart mental i zati on
1. Heavy cost of operation. 4
2. More specialists are essential to each process. 3. Lack of overall development of managerial mana gerial talents. 4. It makes co – co – ordination ordination of various functions and product difficult. 5. It is unsuitable for developing general managers 7. Product Departmentalization:
Grouping activities by product line. Tasks can also be grouped according to a specific product or service, thus placing all activities related to the product or the service under one manager. Each major product area in the corporation is under the authority of a senior manager who is specialist in, and is responsible for, everything related to the product line. For example, a furniture enterprise may be divided into departments for tables, chairs, beds,
dressing table etc.
Product Departmentalization of Furniture Enterprises
Dept. of Tables
Dept. of Chairs
Dept. of Beds
Dept. of Dressing Table
A . Advantages Advantages of of Product D epartmentali zation
1. It place attention and efforts on product line 2. It channelizes specialized capital. 3. It permit growth and diversity of product and services 4. It improve co-ordination of functional activities B . Di sadvantage advantages s of Product Depart Depart mental mental izati izati on
1. It requires more managers with general manager’s abilities. 2. It present increased problem of top management control. 3. It is costly because it requires more materials, personnel and resources. 4. It results in available duplication of staff, money and materials. 5. It encourages employees to identify themselves.
CONCLUSION A departmentalization is a unique group of resources established by management. Departmentalization helps the business organization to specialize activities and expand the business to the extent necessary.
BIBLIOGRAPHY Drucker, Peter. The Practice of Management, New York: Harper, 1954.
5
Gulick, Luther and Urwick, Lyndall, (eds). Pap ers on the Science of Administration. New York: Institute of Public Administration, 1973. Koontz, Harold & Cyril O’Donnell. O’Donnell. Principles of Management. New York: McGraw-Hill, 1964.
6
