departmentation(2)
TRANSCRIPT
Departmentation
Introduction
What is Departmentation?
Process of dividing activities into units & subunits
Not only confined to term departments but it includes divisions, sections & job also
Common Bases For Departmentation
Knowledge & skills-People are grouped by what they know
Work process-Workers are grouped based on the process or activity used by the worker
Business Function-Grouping by the basic function in organization
Time- When work is done, for example: shifts in a factory or hotel or hospital
Contd…
Output-Grouping based on the products or services that the employee works on
Client-Grouping based on the type of clients their work is ultimately sold to
Places-Groups are based on the geographical areas that they serve
Need for Departmentation
Specialization- Departmentation should reflect the specialization in performing work
Coordination- Best results achieved when activities are performed in coordination
Control-Process of analyzing whether intended results are being achieved.
Contd…
Economy-Balance should be maintained b/w cost of creating a department & its contributions
Local conditions-More important for organizations operated in different geographical areas
Human considerations- Human factor plays an important role
Major Benefits of Departmentations
Specialisation Administrative control Fixations of responsibilities Freedom or autonomy Development of managers
Disadvantages
De-emphasis of overall company’s objectives Reduces coordination b/w functions Responsibility for profits is at the top only Slow adaptation to change in environment Limits development of general managers Overspecializes & narrow viewpoint of key
personnel
Ideal Principles of Departmentation
Principle of attainment of enterprise objectives
Principle of comprehensive department Principle of inter-departmental co-operation Principle of promotion of specialization Principle of cost benefit analysis
Contd…
Principle of top-management control Principle of flexibility Principle of better utilization of resources Principle of human consideration Principle of special attention to key-results
areas Principle of autonomous feeling of
departmental heads
Types of Departmentation
Functional Departmentation:- Grouping of departments is done on the basis of functions such as production, finance, marketing sales purchase & personnel
Further sub division of functions may be formed like marketing can be divided into advertisement sales & after sales
Contd...
CEO
PRODUCTION FINANCE MARKETING PERSONAL
ADVERTISEMENT SALES
MARKET RESEARCH
Contd…
Functions divided into 2 parts:- Basic functions- Production Marketing
finance & personnel
Secondary functions-Further parts of basic functions like production- production planning , R&D, quality control & marketing handling
Advantages & Disadvantages of Function
Advantages: Advantage of specialization Easy control over functions Pinpointing training needs of manager Very simple process of grouping activities
Disadvantages: Lack of responsibility for the end of result
Contd…
It leads to increase conflicts & coordination problem among departments
Overspecialization or lack of general management
Types of Departmentation
Products Departmentation:- Grouping of activities & departments formed are given name on the basis of products manufactured in an organization
Applied where there is a large range of products are manufactured
Applied where there are several product lines & functional departments fails
Contd…
CEO
HEAD TV DIVISIONHEAD AC
& REFIGRATIONHEAD COMPUTER
Advantages & disadvantages of Products
Advantages: Ensures better consumer services. Unprofitable products may be easily
determined Assist in development of all around
managerial talent Makes control effective
Contd…
Disadvantages: Expensive as duplication of service functions
occurs in various product divisions Customers & dealers have to deal with
different persons for complaints & information of different products
Types of Departmentation
Territories Departmentation: Geographical regions are adopted for main division as well as for subdivision purposes
Territorial departmentation are adopted when organizations activities are physically dispersed in different locations
Useful where business is on international & national level
Contd…
CEO
HEAD NORTH ZONE HEAD EAST ZONE HEAD WEST ZONE HEAD SOUTH ZONE
Advantages & Disadvantages of Territorial
Advantages: Cater to meet the needs of local people more
satisfactorily It facilitates the effective control Assists in development of all- round
managerial skills
Contd…
Disadvantages: Communication problem b/w head office &
regional office due to lack of communication at some places
Coordination b/w various divisions may become difficult
It leads to duplication of activities which may cost higher
Types of Departmentation
Customers Departmentation: When departments are made to cater different kind of customers
Widely followed in subdividing activities of the marketing department
Helps in supplying good in accordance with the peculiar needs of customer
Contd…
HEAD MARKETING
HEAD WHOLSALE HEAD RETAIL HEAD EXPORT
Advantages & Disadvantages of Customer
Advantages: It focused on customers who are ultimate
suppliers of money Better service to customer having different
needs & tastes Development in general managerial skills
Contd…
Disadvantages: Sales being the exclusive field of its
applications , coordination may appear difficult b/w sales function & other enterprise functions
Specialized sales staff may become idle with the downward movement of sales to any specified group of customers
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