Bases of departmentation

            Bases of departmentation

            Departmentation by Function

Grouping  activites  accorgint  ot  the  function  of  the  management  is  known  as functional departmentation. The basic organizational fucntions are finance, accounting, purchasing, production and marketing

Advantages

Functional departmentation reduces communication and co-ordination problems

                        It promotes high quality decision making

                        It increases job satisfaction of employees

Authority and responsibilty are clearly defined in functional departmentation

Disadvantages

Co-ordination between functions of different departments is very difficult

                        Results in inadequate communication between departments

Departmentation by Teritory or Geography

Grouping all the functions within a specific geographic area is known as geograpic departmentaion. Geographic departmentations is very much suitable for large organizations whose activites are geographically dispersed, Territorial departmentation is suitable for automobile manufacturing, automobile assembly, wholesaling and oil refining

Advantages

                         Production cost and sales prices are lower

                         Transportaiton cast can be reduced to a greater extent

Disadvantages

                        It is very difficult to co-ordinate across departments

                        Top management contorl over departments is very difficult

Departmentation by Customer

In customer departmentaion, separate departments or divisions are made to serve the needs of particular customers. Customer departmentaion is employed in large ad complex orgaization.

Advantages

1.Customer departmention aims to satisfy the needs of the customers in abetter and effective way

2.Managers can become experts in customers area

3.This enables to identify the key customers

4.It enables to understand customers needs.

Disadvantages

                        It is very difficult to achieve co-ordination across departments

                        It requires experts to solve customers problems

                        Grouping of customers into department is a difficult problem

            Departmentation by Product

Product departmentation is suitable for large organizations of products or product lines

5.  Departmentation by Process

Activities are grouped according to the process involved. This suitable for manufacturing enterprises.

For eg: the  processes are drilling process, paintin process, etc..

6.  Departmentation by Time

Grouping of activites on time basis is more common in many organization. In organization there may be first shift, second shift and night shift. The tasks performed by employees in each shift are similar. This type of departmentaion is generally found in public utility services such as Railways, Hospitals, Call centers and in Manufacturing Orgainzations.

7.  Departmentation by Number

Grouping of activities on the basis of number prescribed for each unit is known as departmention by numbers

Eg: In armysoldiers are grouped in Battalion, regiments, brigades, so on…

8.  Matrix Departmention

A hybrid structure in which two or more forms of departmentaion are used together is known as matrix departmentaion. In matrix organization there are dual lines of authority. The matrix departmentaion is applicable in cinstructuion of bridges, in aerospace projects, etc..

Martix Organiation is otherwuise known as Project Organization

9.  Strategic Business Unit

It is a Division of an organization that provides a distinct product or service and has its own mission and goals