Departmentalization
Introduction:
Organisation
involves the identification of individual activities to be undertaken for the
attainment of the objectives of the enterprise and the grouping of individual
activities into administrative units on some logical basis for the purpose of
efficient administration. This has led to the necessity for departmentation. It
is the departmentation that helps the grouping of activities into
administrative units, such as divisions, departments, units, branches,
sections, etc., for the purpose of efficient administration.
Meaning / Definition:
In
the words of L.A. Allen defines
departmentation as “a means of dividing a large and monolithic functional
organisation into smaller flexible administrative units”.
Importance and
Advantages of Departmentation:
The
main advantages of departmentation are:
- It
     contributes to systematic distribution of work among individuals.
- It
     contributes to the attainment of specialisation
- It
     simplifies managerial tasks.
- By
     defining the duties and responsibilities of the executives clearly,
     departmentation fixes accountability for the results. This makes the
     executive alert and efficient.
- Departmentation
     increases the operating efficiency of the organisation.
- By
     bringing about division of functions and responsibilities, departmentation
     provides sufficient scope for growth and expansion.
- By
     giving sufficient powers to the managers in charge of different
     departments and allowing them to take their own decisions within the
     powers given to them, departmentation increases the prestige of the
     managers.
- Departmentation
     is helpful to the management to evaluate the performance of the various
     departments and find out the departments which are not managed properly.
- Departmentation
     facilities proper supervision, as the authority for making decisions is
     diffused to the managers of the departments.
- As
     the authority for making decisions is diffused to the managers of the
     departments under departmentation, departmentation frees the top
     management from routine matters and helps them concentrate on important
     matters.
- Departmentation
     makes budget preparation easy.
- Departmentation
     contributes to performance appraisal. It helps not only in fixing
     responsibility but also in evaluation of work carried out by the
     individuals.
- Departmentation
     facilities effective control by grouping activities and personnel within
     well-defined areas, setting standards of performance and by preparing
     budget.
- Departmentation
     contributes to the development of managerial personnel.
Limitations of
departmentation:
It
is true that departmentation is helpful to the enterprise in many ways. But it
is not free from limitations. Its main limitations are:
- There
     is the problem of co-ordination. The greater the number of departments,
     the more difficult will be the task of co-ordination.
In this connection, it may be noted
that the lack of proper co-ordination would impair the managerial efficiency
and the overall results of the enterprise.
- There
     is also the problem of communication. The work of communication becomes
     more difficult.
- Under
     departmentation, there is also the problem of supervision and control.
- Departmentation
     is expensive in terms of money and efforts. In other words, it increases
     the cost of managing the concern.
- Under departmentation, because of the layering of executives, the operative personnel are far removed from the top management.
