What is Departmentalization? (Departmentation)
Departmentalization is the process of a logical grouping of similar nature of functions into manageable units called departments on the basis of their nature and area specialization for the purpose of overall coordination of organizational resources. Departmentation creates some independent functional units in the organization. It helps to increase the smoothness and working efficiency of the organization.
In an organization, many persons perform various activities in different situations. The task’s nature, process, and procedures may vary. It is not possible to perform all types of work at a time and also by a group. It is essential to classify activities into different units. Thus, departmentalization divides the large and complex functions into smaller and flexible units to accomplish all the jobs in an effective and efficient manner.
Departmentalization is the means of dividing a large and monolithic functional organization into smaller, flexible, and administrative units – Louis A. Allen
Departmentalization facilitates maintenance coordination, communication, and control among all the mechanisms of the organization. It creates separate units with independent responsibilities to the department managers who in turn improve their working efficiency and effectiveness. Besides, it also facilitates to supervise and maintain control over all functional units and therefore expansion of the organization becomes easier.
The question is how we implement departmentalization of an organization? The chief executive of the organization groups the jobs into different departments on the basis of their nature such as human resource, marketing, finance, production, research and development department. Each department is headed by a senior called department head. Eg. in the production department he is called as head of a production department and so on. Similarly, the respective department head is given sufficient authority to control his respective department, and also he is responsible for the performance of his department.
Departmentation can be improved by making a provision of providing bonuses and other facilities to a departmental manager who will perform better work.
Departmentalization can be done by,
Methods/Types of Departmentalization
- Departmentation by Function
- By Product or Service
- By Customer
- By Territory or Geography
- By Process
- By Time
Advantages/ Importance of Departmentalization
The advantages and importance of departmentalization are:
- Specialization at work
- Increase efficiency
- Fix responsibility and authority
- Facilitation in administration
- Feeling of Autonomy
- Balanced workload
- Management growth
#1 Specialization at Work
Departmentalization leads to the benefits of specialization. Here, works are divided into different departments on the basis of their nature and responsibility and are entrusted to a skilled and efficient manager. When a manager involved in one specific function, his expertise and efficiency increase in that particular field.
#2 Increase Efficiency
Departmentation helps to increase efficiency in work through specialization. Every member of an organization has a specific task to do when they involve in particular tasks repetitively their efficiency is increased in the given job.
#3 Fix Responsibility and Authority
In every organization, there must be a balance between the responsibility and authority of an employee. In departmentalization works divided into different units and the respective department head provided fixed authority and responsibility to control over his/her department.
#4 Facilitation in Administrative
Here, the standard of performance of each department and objective to be achieved is planned. When actual performance deviates from planned performance, corrective measures are taken to remove barriers.
#5 Feeling of Autonomy
Departmentation develops feelings of autonomy among departmental managers. In one sense they are responsible to complete the assigned task. But in another sense, they are given sufficient freedom to operate their departments.
#6 Balanced Workload
Here top-level manager is not overburdened, he had divided works into different groups and delegated sufficient authority to functional managers.
#7 Management Growth
In departmentation, there is a provision of a good performer manager can get chance to promote to the high level by doing initiative work.