Management Consulting/principles of management
Explain the methods of Departmentation
Departmentation is a process resulting out of choice to group tasks according to some criterion. The resultant process of departmentation includes decisions regarding segregating organizational work, allocation of work to persons, telling all involved who is in charge and provide for the support needed by those. Given the nature of these choices and decisions, departmentation and the criteria or bases used for creating departments can have serious impact on the organization's effectiveness. Nine bases of departmentation are common among managerial choices:
Types of Departmentation
I) Departmentation by functions/Functional department
II) Departmenation by product or product wise department
III) Departmentation by territory/Geography
IV) Departmentation by customers
V) Departmentation by time
VI) Departmentation by process
VII) Departmentation by numbers
Function wise Departmentation
Under each of these five managers, there will be subordinate managers and under them, the subordinate staff.
The advantages of this type of structure are as follows:
(i) It is a logical reflection of functions.
(ii) It follows the principle of specialisation.
(iii) Maintains power and prestige of major functions.
(iv) Inter-departmental co-ordination is facilitated.
(v) The structure is simple, logical and easy to understand.
(vi) Provides a good means of control at the top.
There are also some disadvantages:
(i) Responsibility for profits tends to be at the top.
(ii) There may be chances of heavy centralisation in decision-making.
(iii) Where geographical centralisation is desirable or required, this form becomes unsuitable.
(iv) This is not very suitable where product lines have to be emphasized.