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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What are the various bases of departmentation in an office ?

Creating departments and departmental heads makes an organisation flexible and adaptive to environment. When responsibility is clear, authority can also be delegated to managers.

The general organisation of this type of departmentation is depicted big fig 6. If there are no departments, it will be difficult to keep track of who is doing what and who is accountable to whom.

It becomes necessary to differentiate clearly between the line authority and functional authority of managers. Territorial bases of departmentation is found in those business where the units are located at different places.

This would be impossible in most cases. Priorities are set and resources are allocated according to the need, importance and urgency regarding their use by different departments. That is, operations which are team-interdependent should be grouped first i.

The product or customer differentiation, both can be the basis of geographic or territorial departmentation.

It also facilitates recruitment and selection of top managers from within the organisation rather than depending on outside sources. The form of organisation structure depends upon the basis of departmentation. Sales people for one product will concentrate on sales promotion of that product only.

Process departmentation is found in those industries which involve different processes of production. With increase in operations of a company, it adds more products to its line of products which require various functional activities production, marketing etc.


Bases Methods Types of Departmentalization

This helps in eliminating the unprofitable products and promoting the profitable ones thereby increasing organisational efficiency. Functional departmentation is not suitable in such cases. So a person is, say, a marketing research analyst, and is presently assigned to the Carnation project, which will take 6 weeks, and will then be assigned to the R.

Rather than A a worker handling step 1, B handling step 2 and C handling step 3, A may carry out all the steps on product Departmentatuon, B carries out the same set of steps for product Y and C for product Z.

Notes on Departmentation: Meaning, Importance and Basis | Organisation

Denotes the combined base departmentation. Groups formed in order to achieve economies of scale. This type of departmentation provide the benefits of both functional and product structures. The focus is on the product line and all functional activities associated with the product line.

In this type of departmentation the finished product of one process becomes raw material in another process. Various regional units may become so engrossed in short term competition among themselves that the overall long term interests of the organisation as a whole may be overlooked.

They can directly communicate with the consumers and frame policies to satisfy their needs. Division of organisation on the basis of geographic dispersal of activities appears on the organisation chart as follows: Service functions are duplicated both at the top and at the operating levels of management. Hence, an appropriate customer departmentalization serves this purpose.

The refrigeration division is further divided on the basis of territory and the territory is further divided on the basis of customers i.

6 Different Basis of Departmentation in an Organisation

In a similar context, a small business or firm may operate only within city boundaries through basss offices established in east zone, west zone, north zone and south zone of the city. Supervisors and managers are appointed to manage these departments.


Similarly, Post Offices are often divided by regions and zipcodes. For example, lawyers in a corporation consult each other to take advantage of specialized skills and to develop a common approach to things. Though this reduces boredom on the work process, it requires trained workers who can carry out all the processes.

Often, it is the underlying technology that determines the departmentation. It is rather difficult to set up specific accountability and profit centres within functional departments so the performance is not accurately measured. First the organisation is divided on the basis of functions. The tightest interdependencies are between the turning, milling and drilling operations. The employees become so focused on departmental goals deparmtentation they lose sight of the overall organisational goals.

In such a company, we generally see departments like a two-wheeler department, three-wheeler department, four-wheeler department, heavy motors department, etc. This method of departmentation can be followed only in marketing division.

Soldiers in army are grouped in numbers to form departments. This basis is suitable for large-sized organisations which have activities dispersed over different geographical areas. Top manager finds it difficult to co-ordinate various functional activities. The goal of an organisation is to earn profits by customer satisfaction. Here’s how the seven categories above fall into the two supercategories, along with some other information about the two categories:.

Different local conditions can create problems of understanding. Departmentation by Process 6.