Departmentation by Different Strategies
1 Departmentation
Departmentation is
the process of
grouping of work
activities into departments, divisions, and other homogenous
units. Key Factors in Departmentation
ü It should facilitate control.
ü It should
ensure proper coordination.
ü It should
take into consideration the benefits of specialization.
ü It should
not result in excess cost.
ü 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.
2 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.
3 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.
4 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.
5 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.
6 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).
7 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.
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