DEPARTMENTATION

Made by :- Rupali Sengar

MEANING OF DEPARTMENTATION
A Departmentation may be defined as a work
group brought together for performing certain
functions of similar nature. Departments are
the various parts or divisions of an enterprise.
In

other

words,

departmentation

is

the

process of division of enterprise into different

parts known as departments.

ADVANTAGES
1. Specialiasation
2. Increased effeciency
3. Fixation of responsibility
4. Appraisal
5. Training of executives
6. Control

TYPES OF DEPARTMENTATION
1. Functional structure
2. Product based structure
3. Geographical/ Territorial based structure
4. Customer based structure
5. Virtual or Network organisation

FUNCTIONAL STRUCTURE
In a functional structure, activities are grouped
and departments are created on the basis of
specified function to be performed. Activities
related to a function are grouped in a single unit
with a view to give a well defined direction to
the whole group.

DEPARTMENTATION BY FUNCTION
CEO

PRODUCTION

FINANCE

MARKETING

PERSONNEL

SALES

ADVERTISING

MARKETING
RESEARCH

ADVANTAGES
It is easier to organise departments based on

functions and sub functions.

It ensure effective utilisation of personnel in

different departments.
It facilitates better coordination of activities

within each department.

DISADVANTAGES
Each department concentrates on a narrow

range of activities relating to its function only.

Excessive

specialisation

may

destroy

teamwork in the organisation.

It may be difficult to achieve coordination

between different departments because of

their different orientations.

PRODUCT BASED STRUCTURE

Product based structure is followed by giant
organisations having multiple product lines.
Under this, each major product or product line
is organised as a seprate division.

DEPARTMENTATION BY
PRODUCT
CEO

COSMETICS

PRODUCTION

FOOD
PRODUCTS

FINANCE

ELECTRICAL
GOODS

MARKETING

PERSONNEL

ADVANTAGES
It focuses individual attention on each product

line.
It leads to specialisation of physical facilities

on the basis of poducts which results in

economy.
It keeps problems of production isolated from

those of others.

DISADVANTAGES
Product departmentation may sometimes lead

to

difficulties

in

coordination

of

certain

specialised activities like marketing, finance,

and accounting.
It may be difficult for an enterprises to adapt

itself to changes in technology, demand,etc.

TERRITORY BASED STRUCTURE

Territory based structure is followed in case of
service

organisation

different

regions

regional

office

or

has

which

have

territory

offices

areas.

independent

department to realise its objectives.

in

Each

functional

ADVANTAGES
It

facilitates the expansion of businessin

various regions.
The departments based on territories can

function as autonomous units.

It is also beneficial from the point of view of

country economic development.

DISADVANTAGES
There is multiplication of physicial facilities. It

leads to uneconomical operations.

There may be lack of talented personnel to

take charge of regional departments.

Attempts

to

enforce

uniforms

marketing

personnel policies in all the regional units may

be contrary to the local needs of some units.

CUSTOMER BASED STRUCTURE

Departmentation by customer may be followed

in enterprise engaged in providing specialised

services to different classe of customers. Under
this, customers are the guide for grouping the
activities. The management group the activities
on this basis to cater to the requirements of
clearly defined customer group.

DEPARTMENTATION BY
CUSTOMER
MARKETING
MANAGER

INDUSTRIAL
SALES

INDUSTRIAL
CONSUMER

MALE
PRODUCTS

GOVERNMENT
SALES

FEMALE
PRODUCTS

EXPORT
SALES

ADVANTAGES
Customer departmentation can focus on the

special needs of different kinds of consumer.

It employs personnel with special abilities for

meeting differnt customer requirements.

DISADVANTAGES
Customer based structure is also not free from
drawbacks. For instance, it creates difficulty of
coordination between the departments organised
on the basis and those organised on other basis.
Greater emphasis to the need of the customer
may lead to less than optimum use of space,
equipment and specialised personnel.

VIRTUAL OR NETWORK
ORGANISATION
A virtual organisation is a temporary network
between a number of companies that come
together to accomplish a specific venture. It is
also called network structure. It is created to
exploit fast changing oppurtunities and share
skills and even facilitate access to global
markets.

THANK YOU