What is Departmentation

Departmentation Meaning

Departmentation’ or ‘Departmentalisation’ is the process of grouping the activities of an enterprise into several units for the
purpose of administration at all levels. 

Koontz and O’Donnell define a department as designating “a distinct area, division, or branch of an enterprise over which a
manager has authority for the performance of specified activities”. 

departments for the purpose
of facilitating administration is called departmentation. It implies the division of total work of an organisation into individual
functions and sub functions. It is the process of division of organisation into different parts known as departments.

 Departmentation can provide a necessary degree of specialisation of executive activity for efficient performance. It can simplify
the tasks of management within a workable span. It also provides a basis on which the top managers can co-ordinate and control
the activities of the departmental units.

The following factors are basic to divide an organization into departments: 

1. Specialization: 

Department should yield the advantages of specialization. Specialization may be functional such as in marketing, we have advertising, sales promotion etc. or byproducts such as cosmetics, condiments etc.

2. Control: 

Departmentation should serve to make control as effective as possible. One activity intended to serve, as a check on another should be under specific executive. Territorial departments (zonal or districts) may be established in such a way that the performance of one can be checked by comparison with the other. A clean break made between two departments will help in fixing responsibility clear and squarely. 

3. Co-Ordination: 

Quite different activities may be grouped together under one executive, because they need to be co-coordinated. In case of orphan activities like filing, or other service function, the most-use criterion may be applied. That is such activities may be clubbed together with the function that relies on it the most. 

4. Attention:

An activity that is considered to be basic to the success of an enterprise may be given greater attention than others and may, for this purpose, be placed in separate division. 

5. Local Conditions:

While forming departments, attention must be given to local conditions, at the places concerned, for example, the personalities of individuals who will man the organization, or the pattern of informal relationships among people, or the need to combine activities into full-time jobs. 

6. Economy: 

The expenses involved in creating a separate division for an activity or activities should also be considered though this should not become the all- important factor. 

The basic need for departmentation is to make the size of each departmental unit manageable and secure the advantages of
specialisation. Grouping of activities and, consequently, of personnel, into departments makes it possible to expand an enterprise
to any extent.

Departmentation is necessary on account of the following reasons: 

1. Advantages of Specialisation: 

Departmentation enables an enterprise to avail of the benefits of specialisation. When every department looks after one major
function, the enterprise is developed and efficiency of operations is increased.

 2. Feeling of Autonomy: 

Normally departments are created in the enterprise with certain degree of autonomy and freedom. The manager in charge of a
department can take independent decisions within the overall framework of the organisation. The feeling of autonomy provides
job satisfaction and motivation which lead to higher efficiency of operations. 

3. Expansion: 

One manager can supervise and direct only a few subordinates. Grouping of activities and personnel into departmentation makes
it possible for the enterprise to expand and grow. 

4. Fixation of Responsibility:

 Departmentation enables each person to know the specific role he is to play in the total organisation. The responsibility for results
can be defined more clearly, precisely and accurately and an individual can be held accountable for the performance of his
responsibility.

 5. Upliftment of Managerial Skill:

 Departmentation helps in the development of managerial skill. the managers
focus their attention on some specific problems which provide them effective on-the-job training. 

6. Facility in Appraisal: 

Appraisal of managerial performance becomes easier when specific tasks are assigned to departmental personnel. Managerial
performance can be measured when the areas of activities are specified and the standards of performance are fixed.
Departmentation provides help in both these areas.
When a broader function is divided into small segments and a particular segment is assigned to each manager, the area to be
appraised is clearly known; and the factors affecting the performance can be pointed out more easily. Similarly, the standards for
performance can be fixed easily because the factors influencing the work performance can be known clearly. Thus, performance
appraisal becomes more effective. 

7. Administrative Control: 

Departmentation is a means of dividing the large and complex organisation into small administrative units. Grouping of activities
and personnel into manageable units facilitates administrative control. Standards of performance for each and every department
can be precisely determined.