Departmentation

First task in designing an organization structure is the identification of activities and to group them properly. The process of grouping activities is commonly known as departmentation.

Need and importance of departmentalization

The basic need for departmentation arises because of specialization of work and the limitation on the number of subordinates controlled by a superior.

1.                  Advantages of specialization :

Thus if the managerial function is conceived as a set of activities facilitating the work of organization, these activities can be carried out more efficiently and effectively through the division of work leading to a specialization of managerial function.

2.                  Fixation of responsibility

Departmentation helps in fixing the responsibility and consequently accountability for the results.

3.                  Developed of managers

Departmentation helps in the development of managers.

4.                  Facility in Appraisal

Managerial performance can  be measured when the area of activities can be specified and standards in respect of these can fixed. Depertmentation provides helps in both these areas.

5.   Feeling of Autonomy :

Deprtmentation provides motivation by developing feeling of autonomy to the extent possible. There are several bases of departmentation. The more commonly used bases are function, produt, territory, process, customer, time etc. Some of these bases are internal-operation – oriented like function, process, time while others like product, territory and customer are output-oriented.

Choice of bases for departmentation

The selection of bases for departemntation involves a consideration of the relative advantages of each base for the organization. Ideally speaking, a suitable basis of departmentation is one which facilitates the performance of organizational functions efficiently and effectively so that its objective are achieved.

1.                  Specialization:

The basis of departmentation should reflect the specialization in performing the work.

2.                  Coordination:

Coordination involves that all the related activities are performed in a way that their performance is synchronized so that each activity contributes to others.

3.                  Economy

A balance should be maintained between the cost of creating a department and its contribution. The existence of a department is desirable only when it contributes more than its cost.

4.                  Focus on Result

Those activities which contribute to the achievement to these results should be given proper attention.

5.                  Local Conditions :

Local requirements of the organization should also the taken into account while creating departments.

6.                  Human Considerations :

Departments should be created on the basis of availability of personnel, their aspirations and value systems, informal work groups and attitudes of people towards various forms of organization structure.