Departmentation Methods fully explained with examples.

1. By--- Bhalchandra
Inamdar

2. What It Means?
It is a process of dividing small
units of organizational activities.
Departmentation may be called division
sections branch etc. it helps to provide
the specialization, develops the skill and
knowledge of manpower and the
efficiency of manpower of an enterprise
will be increased. It specifies the area of
the activities that facilitate the
managerial task.

3. Definition Of Departmentation
According to Koontz and O’Donnell,
“Departmentation is a process of
dividing the large monolithic functional
organization into smaller and flexible
administrative units.”

4. Methods Of Departmentation
1)Departmentation by Function:2)Departmentation by location or the place :3)Departmentation by processes :4)Departmentation by products:5)Departmentation by Customer:-

5. Departmentation by Function
This is the simplest and most
prevalent basis for departmentation.
Under this all the functions of similar
nature are divided in different units
which are called departments.

6. Departmentation By Function
CEO
PRODUCTION
FINANCE
MARKETING
PERSONNEL
SALES
ADVERTISING
MARKETING
RESEARCH

7. EXAMPLE
The functions of manufacturing concern
can be divided into production
department,marketing department, financial
department and personnel department. Again sub
departments can be established in each
department

8. MERITS:
1. SIMPLER AND FAMILIAR
2. ECONOMY
3. OVERLAPPING AND
DUPLICATION
DEMERITS:
1. DIFFICULT TO MEASURE
2. AFFECT THE PERFORMANCE

9. Departmentation by location or the
place
Departmentation by location or place
means, "Grouping of activities by area or
territory is common in enterprises operating
over wide geographic areas.” Organizations
which are involved in banking , insurance ,
transportation.

10. Departmentation by location or the place
MARKETING
MANAGER
EASTERN
ZONE
NORTHERN
ZONE
CENTRAL
ZONE
TAMILNADU
SOUTHERN
ZONE
ANDHRA
PRADESH
WESTERN
ZONE
KARNATAKA
KERELA

11. EXAMPLE
India could be divided into north ,
south , east , west , central zones.
Further North Zone can be divided into
Chandigarh, New Delhi, Ludhiana.

12. MERITS:
1. REGION WISE INTEGRATION
2. ADOPT AND RESPOND
3. LOCAL LAWS AND CUSTOMS
DEMERITS:
1. REDUCE CONTROL OF THE
TOP MANAGEMENT
2. UNIFORM POLICIES
3. COMPITITION

13. Departmentation by
processes
In this process involved in
production or various types of
equipment's used are taken as basis of
departmentation.The basic aim to do
process departmentation is to achieve
economic benefit.

14. Departmentation by
processes
PRODUCTION
MANAGER
GINNING
SPINNING
WEAVING
DYEING
PRINTING

15. EXAMPLE
Process departmentation in case
of textile
organization can be by dividing the
production into spinning,dyeing, weaving,
finishing departments.

16. MERITS
:
1. ECONOMY OF OPERATION
2. EFFICIENCY
3. TRAINING AND DEVELOPMENT
DEMERITS
: 1. DIFFICULT TO MEASURE THE
PERFORMANCE
2. PROBLEM OF CO-ORDINATION
3. AFFECTS THE OPERATION

17. Departmentation by products
Product departmentation involves the
grouping together of all the activities
necessary to manufacture a product or
product line.

18. Departmentation by
products
CEO
COSMETICS
PRODUCTION
FOOD
PRODUCTS
FINANCE
ELECTRICAL
GOODS
MARKETING
PERSONNEL

19. EXAMPLE
In an automobile organization
the
departmentation could be car
division, truck
division, bus division.

20. MERITS:
1. PROPER ATTENTION
2. IDENTIFICATION AND DROPING
3. DECENTRALISATION
DEMERITS:
1. COST OF OPERATION
2. PROBLEMS OF CONTROL
3. CENTRALISE THE
AUTHORITY

21. Departmentation by
Customer
Grouping of activities around
marketing channels involves making an
organization structure reflect the ways an
organization reaches the ultimate
customer.

22. Departmentation by
Customer
MARKETING
MANAGER
INDUSTRIAL
SALES
INDUSTRIAL
CONSUMER
MALE
PRODUCTS
GOVERNMENT
SALES
FEMALE
PRODUCTS
EXPORT
SALES

23. EXAMPLE
In pharmaceutical companies
different customers could be doctors ,
hospitals , government , retail stores.
Further it could be wholesale
, retail , export.

24. MERITS:
1. UNDERSTAND THE PARTICULAR
NEEDS
2. PROPER ATTENTION
3. INCREASE GOOD WILL
DEMERITS:
1. CO-ORDINATION
2. UNDERUTILISATION
3. COST OF OPERATION

25. THANK YOU…