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Definition, Meaning and Bases of Departmentation such as Functional, Territorial, Process, Product, Customer, Time, their merits & demerits are explained in this. The question arises: On what basis should we carve up the members of the organization Here are six common bases for departmentation. Departmentation: Meaning and Bases | Organisation Process. Article shared by: After reading this article you will learn about Departmentation: 1. Meaning of.

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A department created for satisfying customer requirements becomes specialized base that area resulting in cost efficiency. This necessitates the introduction of departmentation. Military forces also use this method. For a trader, the major activities are buying and selling, a bank performs borrowing and lending functions. It also facilitates recruitment and selection of top managers from within the organisation rather than depending on outside sources.


It is also good for workers who cannot work during day time. This can also result in conflict amongst process managers.

The goal of an organisation is to earn profits by customer satisfaction. The general organisation of this type of departmentation is depicted big fig 6.

The marketing department is further divided on the basis of product lines i. The production, purchase, personnel and marketing activities are looked after by departmental managers but finance is vested at the headquarters. Workers are grouped based on the process or activity used by the worker. This leads to the familiar departments of manufacturing, marketing, engineering, finance, and so on.

  ISO 14692 1 PDF

Departmentation (Grouping)

The departmental manager is accountable for functions performed by his department. Territorial bases of departmentation is found in those business where the units are located at different places. There could be further extension of this basis of departmentation. Grouping based on the products or services that the employee works on. The departmental managers, therefore, must have specialised skills to determine the consumer needs. Departmentation by Products 3.

Marketing department, for instance, can be further branched out on the basis of territorial or geographical departmentation. Departmentation by Function 2.

All the primary and auxiliary activities are managed by one manager. This promotes product specialisation which helps in product growth.

Departmentation by Customers 5. Specialisation promotes efficiency, lowers the cost of production and makes the products competitive.

Manufacturing paper, for example, requires processes like crushing the bamboo, making pulp, purifying the pulp, making paper rolls, and cutting it into rims. For example, computer companies often have different sales departments for home, small business, educational, government and large business customers. The sales people belong to local areas of operation. This is the most common basis of departmentation, under this the departmentation takes place on the basis of the basic functions of the enterprise.

For example, customers can be classified under types such as, international or foreign customers, inland or domestic customers, bulk purchasing or wholesale customers, retail customers, etc.

During boom conditions, the demand increases and, therefore, extra load has to be borne by machines. This often leads to functional groupings because people are comfortable with their “own kind” as in technical people prefer technical people, sales types like sales types, etc.


Notes on Departmentation: Meaning, Importance and Basis | Organisation

For example, if each department in a factory has a maintenance person, it may be inefficient because departmentatino small departments don’t have quite enough work for a fulltime maintenance person, while the big departments have too much. Sometimes, several bases departjentation departmentation may be used simultaneously.

There are four kinds of increasingly tight interdependence: He can co-ordinate the efforts of people working under him. Product departmentation is suitable for product diversification where marketing characteristics of each product are different from others.

Here you can publish your research papers, essays, letters, stories, poetries, biographies, notes, reviews, advises and allied information with a single vision to liberate knowledge. For example, a job requires three steps for its completion. Clear identification of responsibility and authority increases efficiency of the departmental activities. What are the duties of office supervisors?

6 Different Basis of Departmentation in an Organisation

No Comment Yet Please Comment. For example, a large company may operate globally through its different zonal departments established on a country basis. Personnel department has sub-departments to take care departmenttation appointments, training, placement and promotion of employees.

Since each department has auxiliary departments like personnel, accounting etc. Thereafter, some other basis of departmentation has to be used. Step 1, Step 2, and Step 3.