Departmentation by organization enterprise functions

This article throws light upon the six different basis of departmentation in an organisation. Departmentation by Function 2. Departmentation by Products 3.

Departmentation by organization enterprise functions

Territorial or Geographical Departmentation by organization enterprise functions.

Process or Equipment wise Departmentation. Combined or Composite Form of Departmentation. It refers to grouping the activities of an enterprise on the basis of functions such as production, sales, purchase, finance, personnel, etc.

The actual number of departments in which an enterprise can be divided depends upon the size of establishment and its nature. To begin with, we may have three or four main departments.

Organizing function of management synchronizes and combines the human, physical and financial resources of the organization. All the three resources are important to achieve the desired goals. Principals of Manageme. DEPARTMENTATION. It is grouping activities on the basis on function of an enterprise. The basic enterprise functions are production, selling, and financing functional departmentation is bases for organizing activities and in organizational structure. Formal organization means the intentional structure of rods. departmentation by functions of departmentation and explain Answer: Departmentation Departmentation enables an organization to avail the benefits of specialisation. Departmentation by by by by Enterprise Territory or geography Customer Group Product1/5(1).

With the growth in the size of the business, more departments and sub-departments may be created. A simple representation of functional departmentation is given below: The important advantages of functional departmentation are: It is a very simple, natural and logical way of grouping activities.

It promotes specialisation and expertise in various functional areas and experts can be employed. It facilitates co-ordination both within the function and at the inter-departmental level. It generates a high degree of centralisation at the level of chief executive.

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Functional departmentation suffers from the following drawbacks: This hinders the development of all-round managers. The grouping of activities on the basis of products is very popular with large organisations having distinct type of products.

Under this method, all activities related to one type of product are put together under one department under the direction of a production manager.

An electronic company, for instance, may have different departments dealing in television sets, radios and transistors, computers, agro-dairy instruments, etc. A simple representation of product wise departmentation is given as follows: The following are the main advantages of product wise departmentation: Product wise departmentation suffers from the following drawbacks: Territorial or Geographical Departmentation: When several activities of an enterprise are geographically dispersed in different locations, territorial or geographical departmentation may be adopted.

Methods of Departmentation (6 Methods)

All activities relating to a particular area or zone may be grouped together under one zonal manager or head. There may be further sub-division of activities under one zonal manager as illustrated here: The territorial departmentation offers the following advantages: A business house may be divided into a number of departments on the basis of customers it serves, viz.

The peculiar advantage of customer wise departmentation is that it ensures full attention to different types of customer and their different needs, tastes and requirements can be read effectively.

However, it may not be possible to group all activities of an enterprise on the basis of customers. In fact,the activities may be classified or grouped on such basis.

But there may be problems of co-ordination with other departments. There may not be enough work, at times, in case of certain types of Customers. This may lead to idle capacity. Process or Equipment Wise Departmentation: An enterprise where production is carried through different processes may adopt process wise departmentation to enable continuous flow of production.

Similarly, where work is carried on machines which are common, departments may be created on the basis of equipments, such as milling departments, grinding departments, lathe department etc. The main advantage of this method is that it avoids duplication of equipment in various activities.

Moreover, specialised people can be engaged to work on specialised equipments and departments. In practice, it may not be advisable to create departments on the basis of any one of the above mentioned methods.

An enterprise may have to combine two or more of the methods of departmentaton to make best use of all of them.

Such a method is known as combined or composite method of departmentation. This can be illustrated as follows:Different methods of creating departments in an enterprise are discussed below: (a) By Function: Departmentalization by function is shown in Fig.

, wherein the activities of the organization are divided into the primary functions to be performed-manufacturing, marketing engineering, research and development, employee relations and finance. Jun 06,  · Get Access to + free MBA Resource.

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Departmentation by organization enterprise functions

departmentation by functions of departmentation and explain Answer: Departmentation Departmentation enables an organization to avail the benefits of specialisation.

Departmentation by by by by Enterprise Territory or geography Customer Group Product1/5(1). Organizing function of management synchronizes and combines the human, physical and financial resources of the organization.

All the three resources are important to achieve the desired goals. Departmentalization is a process used to classify the functions, activities and people of the enterprise into different units with an aim of increasing the efficiency of the management and maintaining control.

Read this article to learn about “Departmentation: Its concept, Structure, Benefits and other Details!” The functions may change according to the objectives of that particular organisation. The main merit behind this kind of structure is to achieve size advantage by putting people with common stills and organisations into similar units.

What is the Departmentation by Functions in management? (Limitations )