Departmentalization
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Departmentalization involves grouping jobs and activities into departments to achieve organizational objectives. There are three main types of departmentalization: functional, territorial, and customer-based. Functional departmentalization groups employees based on their specialized function, such as marketing, finance, or production. Territorial departmentalization groups employees based on geographic region. Customer-based departmentalization creates departments oriented around different customer markets or channels. The document discusses the advantages and disadvantages of each type and when each would be most suitable depending on factors like company size and activities.
Departmentalization
- 2. Meaning • Departmentalization is defined as the process of grouping individual jobs into departments. • It involves grouping of activities and employees into departments so as to achieve the organisational objectives. • The grouping into departments of work activities that are SIMILAR and LOGICALLY connected
- 4. Importance specialization Expansion Autonomy Fixation of responsibility Appraisal Management development Administrative control
- 7. 1.Functional departmentalization A form of departmentalization in which individuals engaged in one functional activity,such as marketing or finance, are grouped into one unit. Under functional departmentalization each major function is organised as a separate department. For example: production, sales, financing and personnel are basic functions in a manufacturing enterprise . on the other hand in a retail store buying , selling and finance are the major function.
- 9. Advantages makes supervision easier efficient use of resources Occupational specialization Optimum utilisation of manpower Increases managerial efficiency Facilitates delegation of authority Eliminates duplication of efforts Lower cost Promotes control and coordination within a department
- 10. Disadvantages difficult to get quick decision harder to determine accountability Too much emphasis on specialization May lead to conflicts Coordination problem Delay in decision making
- 11. Suitability It is most suitable when the size of the organization is small,has a diversified activities and operations require a high degree of specialization and offers a limited line of products.
- 12. Lets discuss In an electrical goods manufacturing company,there are four main activities marketing production finance personnel the general manager is planning to structure the organisation. Which organisational departmentaion would MAIT future managers would suggest him???why?
- 13. Answer I would suggest functional departmentatlization Reasons are : each functional area of business is controlled by expert makes supervison easier
- 14. 2.Territorial /geographical departmentation Territorial Organization is especially attractive to large scale firms or rather enterprises whose activities are physically or geographically dispersed. All the activities of given area of operation are grouped into zone ,division ,branches This structure is suitable for large scale organization or whose activities are physically or geographically spread. This structure is most often used in sales & in production
- 15. Territorial /geographical departmentation Eastern Zone Kolkata Central Zone Kolhapur Northern zone Delhi Southern zone Chennai Western zone Mumbai Head Office Mumbai jalandhar chandigarh New delhi ajmer branch branch branch branch
- 16. Advantages Place emphasis on local market & problem Take advantage of economic of local operations Place responsibility at lower level Better face to face communication with local interest Improve coordination in a region Serve local needs better
- 17. Disadvantages Require more person with general manager abilities . Increases problem of top management control Require good caliber managers Increase problems of control
- 18. 3. Departmentation by customer Customer based departmentation is basically market – oriented in which department are created around the market served or around marketing channel CUSTOMERS ARE THE KEY TO THE WAY ACTIVITIES ARE GROUPED wholesale Retail Hire purchase export Marketing Manager
- 19. • Advantage • It fulfils the expectation & needs of customer • Better service to customer • Fully focus on customer • Disadvantages • Their may be duplication of activities • Co-ordination is difficult • Conflict 19
- 20. Choosing a basis for departmentation 1.Specialisation: The activity of an organization should be grouped in such a way that it leads to the specialization of work. It helps to improve efficiency and economy of operations. 2.Coordination: Coordination in the performance of different activities is necessary so that they contribute maximum towards the organizational goals.
- 21. 3.Control: The departmentation should ensure that effective control helps to achieve organizational goals efficiently & economically. 4.Attention: The various activities should be given adequate attention so that each necessary activity is performed & there is no unnecessary duplication of activities.
- 22. Thank you