DEPARTMENTATION BY DIFFERENT STRATEGIES
DEPARTMENTATION refers to the process of grouping activities into
departments. Departmentation is the process of grouping of work activities into
departments, divisions, and other homogenous units.
Key
Factors in Departmentation
It should facilitate control.
It should ensure proper coordination.
It should take into consideration the benefits
of specialization.
It should not result in excess cost.
It should give due consideration to Human
Aspects.
Departmentation
takes place in various patterns like departmentation by functions, products,
customers, geographic location, process, and its combinations.
A) FUNCTIONAL DEPARTMENTATION
Functional
departmentation is the process of grouping activities by functions performed.
Activities can be grouped according to function (work being done) to pursue
economies of scale by placing employees with shared skills and knowledge into
departments for example human resources, finance, production, and marketing.
Functional departmentation can be used in all types of organizations.
Advantages:
Advantage of specialization
Easy control over functions
Pinpointing training needs of manager
It is very simple process of grouping
activities.
Disadvantages:
Lack of
responsibility for the end result
Overspecialization
or lack of general management
It leads
to increase conflicts and coordination problems among departments.
B) PRODUCT
DEPARTMENTATION
Product departmentation is the process of 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. Dabur India Limited is the India’s largest Ayurvedic
medicine manufacturer is an example of company that uses product
departmentation. Its structure is based on its varied product lines which
include Home care, Health care, Personal care and Foods.
Advantages
It
ensures better customer service
Unprofitable
products may be easily determined
It
assists in development of all around managerial talent
Makes
control effective
It is
flexible and new product line can be added easily.
Disadvantages
It is
expensive as duplication of service functions occurs in various product
divisions
Customers
and dealers have to deal with different persons for complaint and information
of different products.
C) CUSTOMER
DEPARTMENTATION
Customer departmentation is the process of
grouping activities on the basis of common customers or types of customers.
Jobs may be grouped according to the type of customer served by the
organization. The assumption is that customers in each department have a common
set of problems and needs that can best be met by specialists. UCO is the one
of the largest commercial banks of India is an example of company that uses
customer departmentation. Its structure is based on various services which
includes Home loans, Business loans, Vehicle loans and Educational loans.
Advantages
It
focused on customers who are ultimate suppliers of money
Better
service to customer having different needs and tastes
Development
in general managerial skills
Disadvantages
Sales
being the exclusive field of its application, co-ordination may appear
difficult between sales function and other enterprise functions.
Specialized
sales staff may become idle with the downward movement of sales to any
specified group of customers.
D) GEOGRAPHIC DEPARTMENTATION
Geographic departmentation is the process of
grouping activities on the basis of territory. If an organization's customers
are geographically dispersed, it can group jobs based on geography. For
example, the organization structure of Coca-Cola Ltd has reflected the
company’s operation in various geographic areas such as Central North American
group, Western North American group, Eastern North American group and European
group
Advantages
Help
to cater to the needs of local people more satisfactorily.
It
facilitates effective control
Assists
in development of all-round managerial skills
Disadvantages
Communication problem between head office and
regional office due to lack of means of communication at some location
Coordination between various divisions may
become difficult.
Distance between policy framers and executors
It leads to duplication of activities which may
cost higher.
e) PROCESS DEPARTMENTATION
Geographic departmentation is the process of grouping activities on the
basis of product or service or customer flow. Because each process requires
different skills, process departmentation allows homogenous activities to be
categorized. For example, Bowater Thunder Bay, a Canadian company that harvests
trees and processes wood into newsprint and pulp. Bowater has three divisions
namely tree cutting, chemical processing, and finishing (which makes
newsprint).
Departmentation by process: -
Advantages
Oriented towards end result.
Professional identification is maintained.
Pinpoints product-profit responsibility.
Disadvantage
Conflict in organization authority exists.
Possibility of disunity of command.
Requires managers effective in human relation
F) MARTIX DEPARTMENTATION
In actual practice, no single pattern of grouping activities is applied
in the organization structure with all its levels. Different bases are used in
different segments of the enterprise. Composite or hybrid method forms the
common basis for classifying activities rather than one particular method,. One
of the mixed forms of organization is referred to as matrix or grid
organization’s According to the situations, the patterns of Organizing varies
from case to case. The form of structure must reflect the tasks, goals and
technology if the originations the type of people employed and the
environmental conditions that it faces. It is not unusual to see firms that
utilize the function and project organization combination. The same is true for
process and project as well as other combinations. For instance, a large
hospital could have an accounting department, surgery department, marketing
department, and a satellite center project team that make up its organizational
structure.
Advantages
Efficiently manage large, complex tasks
Effectively carry out large, complex tasks
Disadvantages
Requires high levels of coordination
Conflict between bosses
Requires high levels of management skills
Related Topics
Privacy Policy, Terms and Conditions, DMCA Policy and Compliant
Copyright © 2018-2023 BrainKart.com; All Rights Reserved. Developed by Therithal info, Chennai.