DEPARTMENTATION Module-4

Meaning Departmentation means the process by which similar activities of business are grouped into units for the purpose of facilitating smooth administration at all levels.

Need and Importance of Departmentation It increases the operating efficiency of the employees. It makes the executive alert & responsible in his duties. It increases the prestige & skill of the departmental heads. It helps in better co-ordination among the managerial personnel

Basis for Departmentation Maximum use : optimum utilisation of resources Interest: supervising new activities generates interest among people. Competition: single person handling same kind of job will eliminate competition Policy matter: e.g. finance department may handle the monetary aspects of sales dept. Separation: complicated activities can be handled efficiently when separated Proper attention : activities should be assigned to those who have the skill and can devote attention Co-ordination : team work

Types of Departmentation Functionsproduct or serviceregions Customersprocess timeTypesnumbers Marketing channels

Departmentation by Functions General Manager Production Sales Accounts Finance Purchase Activities are grouped on the basis of functions which are to be performed. Principle of specialization and division of labor One of the simplest methods of departmentation.

Departmentation by Product/Service General Manager Sports goods division Hosiery Division Plastics Division Production Sales Accounts Finance Purchase Made by large scale business-units Functional units for each product are created within the general structure.

An Example of Organisation by Product/Activity Imaging and Printing Group Personal Systems Group Enterprise Systems Group HP Services HP Financial Services Hewlett Packard

Departmentation by Regions/Area Board of Directors Managing Director General Manager Manager Manager Manager Manager north zone east zone West zone South zone

Organisation by Area Hewlett-Packard’s Headquarters Worldwide All activities in an given area are grouped under one manager. E.g. Indian Railways, Continent wide market, country wide markets Americas Houston, Texas Europe, Middle East, Africa Geneva, Switzerland Asia Pacific Hong Kong Hewlett Packard

Departmentation by Customers Board of Directors Managing Director General Manager Marketing Manager Consumer sales Industrial Buyers Exports

Departmentation by Customers Specialised attention & service to every customer Improves goodwill and sales.

Departmentation by Process/ Equipment General Manager production dept.Marketing dept Finance dept Lathe Grinder Assembly Superintendent Superintendent Superintendent

Departmentation by Process Grouping activities into departments on the basis of processing or technologies involved in the production of a product. There is no duplication of costly and heavy equipments. Textile Mill Ginning Spinning Weaving Dyeing Printing Packing Sales

Departmentation by Process Sugar plant Crushing Refining Finishing

Departmentation by Time Activities are grouped together on the basis of the time of the performance. Many organizations are engaged in round-the- clock operations and departmentalize on the basis of time by having work shifts. Activities are departmentalized by time (day, afternoon, night shift)

Departmentation by Numbers Departments made on the basis of allotment of number of men to them. Principle of span of Management is used under this type of departmentation Example: Army soldiers are classified into Squads battalions( ) companies( ) Brigades Regiments